Banking Types Of Bank Accounts

Types Of Bank Accounts

Saving Account

Saving accounts are opened by individuals in banks to save some share of their earnings .Main aim of saving account is to promote saving habit among individuals.

These saving accounts are opened on the name of individuals only.

On saving account an individual earns some rate of interest, these rate of interest varies from bank to bank. Earlier this rate of interest in fixed by RBI but now RBI has given power to banks to decide their own rate of interest on saving account .

This rate of interest is usually 4% but some private banks offering 6% rate of interest too.

In saving accounts there is restriction a person can deposit or withdrawal money within a month. Minimum deposit an individual has to maintain in account (In PSU banks) is Rs 1000 or less as some bank offering zero balance accounts.

Current Account

Current account are opened for business transactions, on the name of firm or company.

Banks offered no rate of interest on money held in current account but provide extra features as compared to saving account like there is not limit on depositor withdrawal in current account but no passbook is issued for current account holder.

Minimum deposit needed to open current account is Rs 5000 or depends on respective bank.

Recurring Deposit Account or R.D.

A recurring deposit account is a saving feature that bank offers to their customers,

who can save only small amount of money per month.

In recurring deposit account a person deposit a fixed sum of money for fixed period like a person deposit Rs 500 per month for one year.

Bank pays interest on the deposit money every month. After the completion of fixed period bank pay the deposit money along with interest to his customer.

Recurring deposit account are generally meant for salary earning people who can save a fixed sum of money every month.

Fixed Deposit Account or Term Deposit Account

In fixed deposit account, a person deposit a fixed sum of money one time only for the

fixed period.

Bank pays the rate of interest on the fixed deposit account depends on tenure of deposit account. After the completion of period bank pay the amount along with rate of interest incurred on the amount .

Banks also charge penalty if premature withdrawal is done.

For NRIs who wants to invest in India and earn interest on their hard earn money , as rate of interest offered by Indian banks is higher than western counterparts so it is attractive option to deposit money in Indian banks and earn good rate of interest .

FCNR Deposit Account

FCNR stand for Foreign Currency Non -Resident account. This account is opened by NRIs.

In this account a person invest a fixed sum of money for a period not less than one year and maximum  five years in any foreign currency in FCNR account.

After the completion of fixed period principal and interest is paid in foreign currency in which he had deposited.

NRO Deposit Account

NRO stand for Non Resident Ordinary saving account

The Non Resident Ordinary Account (NRO Account) is a Savings / Current /Recurring Deposit / Fixed Deposit bank account held in India, in Indian Rupees.

NRO account is opened by any person outside India if he want to earn attractive rate of interest in India and also have some earnings in India.

NRE Account

NRE stands for Non Resident External Account

The Non Resident External Account (NRE Account) is a Savings / Current/Recurring

Deposit / Fixed Deposit bank account held in India, in Indian Rupees.

Such account scan be opened only by the NRIs. With effect from March 1, 2014, interest rates offered by banks on NRE deposits cannot be higher than those offered by them on comparable domestic rupee deposits.