Banking in India has evolved vastly from last several decades. People are have realised the benefits of saving the money and even the banks are providing some beneficial services for the customers. The evolution of technology has also progressed the banking in India. Almost all the banks in India now provide the facilities such as mobile banking, net banking, instant money transfer and so on. The Demonetization move by Government of India had affected the banking sector for a while but the things are settling now. 2 years ago India’s Prime Minister Mr Narendra Modi launched Pradhan Mantri Jan Dhan Yojana (PMJDY) under which 26.68 crore new bank accounts were opened to avail every citizen of India with the banking and financial facilities like banking deposits and savings, remittance, insurance, credits, loan and so many other banking services. The accounts were opened with zero balance so that everyone could afford it. This scheme has caused a huge growth in the banking sector in India. Opening a bank account has become a necessity nowadays. The type of bank account you want to open should be according to your needs. Many questions run through your mind while choosing a bank and type of bank account you want. There are four basic types of bank accounts in India. Those are Savings account, Current Account, Recurring Deposit, Fixed Deposit. As the time passed the banking needs of people changed hence the new types of bank account were made to fulfil the customers’ needs. Each type of bank account is explained here.
Types of Bank Accounts in India: Savings Account
Saving accounts are the popular type of bank accounts among the masses in India. Savings accounts are provided to encourage people to save money and collect their savings. People with a fixed steady income, open savings account for convenient banking services. This type of accounts is also used by students, senior citizens and pensioners. Savings account also give the customers benefits in form of interest on the amount you have deposited in your savings account. The rate of interest varies bank by bank from 4% to 7%. The modern savings accounts give more features like Bill payments and Quick transactions. For savings accounts, a minimum account of money should be present in the account and these type of accounts have withdrawal limits means the bank determine how many times and how much amount you a withdraw in a specific time period. There are a few different types of savings accounts available today, those are, Salary based savings account, Savings accounts for senior citizens, Savings accounts for children and minors, Exclusive benefits accounts for women, Zero balance savings account, Linked savings account, Post office savings account.
Types of Bank Accounts in India: Current Account
Current accounts are not made for savings. This type of account is used by businessmen and individuals who want to a liquid flow of cash from their bank account. Current account doesn’t have any limits on the withdrawals. You can make any number of transaction with any amount of money in a day. Most of the current accounts are opened with the firm’s or business’s name. The cheque-book facility is given and the account holder can deposit any type of cheques and Demand Drafts which are given them by their clients. Banks usually do not provide any rate of interest is the case of current accounts but the some the banks have made changes in their bank policies. Current account doesn’t have any maturity benefits as their a no steady fixed amount in the current accounts.
Types of Bank Accounts in India: Fixed Deposit Account/Term Deposits
Fixed Deposits are popularly known as FD Accounts. All the commercial banks(HDFC, ICICI, Kotak, Yes Bank), Public Sector banks(State Bank of India, Bank of India, Bank of Baroda etc) and Cooperative banks(Saraswat, Abhyudaya etc) provide the Fixed Deposit account facility with wide range of tenure ranging from 7 days to 10 years. Th term “Fixed” in Fixed Deposits denotes that the customers must keep the specific amount in the FD account for fixed time period or tenure wihih is called as the maturity of the FD account. In a case of need, the customers can request to break the FD prematurely by paying the penalty amount which is usually 1% or some banks do not apply penalties. The rate of interest for Fixed Deposit account varies bank by bank. The private sector and foreign banks offer a higher rate of interest.
Types of Bank Accounts in India: Recurring Deposit Account
These type of accounts are popularly known as RD accounts. People who do not have lump sum amount for savings but are willing to save a small amount of money every month use Recurring/RD accounts. This type of account helps you to save money for your long term plans such your child’s education, daughter’s marriage, or you have to buy a car without loans. In RD accounts, a person has to deposit fixed amount of money every month, minimum 100 Rs. failing to deposit this will cause a small penalty amount. The maturity of RD account ranges from 6 months to 10 years. the account holder is issued with a passbook where the entries of deposits are made. The account can be a single holder or joint. You can also nominate a person for your RD.
There is some more type of bank accounts in nowadays, those are Smart Deposits, Power Saving Deposits, Automatic Sweep Deposits, 2-in-1 deposits and some other. If you liked our humble attempt to provide information, let us know in the comment section below.