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Types of Bank Account

There are different types of accounts that a customer can open with a bank. These varies from saving account to fixed deposit account, current account etc. The various types of accounts which a banker offers are as follows:-
SAVING ACCOUNT: -
These deposits accounts are the most popular deposits for individual. These accounts not only provide cheque facility but have lot of flexibility for deposits and withdrawal of funds from the account. Most of the banks have rules for the maximum number of withdrawals in a period and the maximum amount of withdrawal, but hardly any bank enforces these. However, banks have every right to enforce such restrictions if it is felt that the account is being misused as a current account. Another important point is, this is normally intended for person above 18 years of age but person between 10 to 18 years can also open individually without guardian but with some restrictions. Minor accounts i.e below 10 years accounts has to be opened with guardian only.
CURRENT ACCOUNT: -
In this type of accounts, depositor can withdraw money whenever he requires it. Generally, no interest is paid on account deposits because bank has to keep the cash ready at all time to meet the requirements of the depositor. Current Accounts are basically meant for businessmen and are never used for the purpose of investment or savings. These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day. Most of the current accounts are opened in the names of firm / company accounts. Cheque book facility is provided and the account holder can deposit all types of the cheques and drafts in their name or endorsed in their favour by third parties. Bank charges certain service charges, on such accounts.
RECURRING DEPOSITS ACCOUNT –
These are special kind of Term Deposits and are suitable for people who do not have lump sum amount of savings, but are ready to save a small amount every month. Normally, such deposits earn interest on the amount already deposited at the same rates as are applicable for Fixed Deposits/Term Deposits. Under these type of deposits, the person has to usually deposit a fixed amount of money every month (usually a minimum of Rs,100/- p.m.). Any default in payment within the month attracts a small penalty. Under these flexible RDs the person is allowed to deposit even higher amount of installments, with an upper limit fixed for the same e.g. 10 times of the minimum amount agreed upon. Recurring Deposit accounts are normally allowed for maturities ranging from 6 months to 120 months. Premature withdrawal of accumulated amount permitted is usually allowed (however, penalty may be imposed for early withdrawals). These accounts can be opened in single or joint names.
FIXED DEPOSIT ACCOUNT-
It is a deposit of money that pays higher interests than a savings account, but imposes conditions on the amount, frequency and/or period of withdraws. It is also called time deposit. All these accounts are secure and carry a government guarantee. They can be operated for a tenure ranging from 7 days to 10 years in Indian banking system.They are not payable on demand and do not enjoy cheque facility. The interest rate may vary from bank to bank. Interest rates will be slightly higher for senior citizens. Premature withdrawal of the deposits is possible, but it attracts penalty at the rates varying from 0.5% to 1.5%. If the deposits are Rs. 1 Crore or more, they come under bulk deposits and interest rates may vary further. Loan facility is available on principal as well as on interest.
Besides these four accounts there are other types of accounts too which a customer can have with his baker. These may be Joint Account, Business Account, Student Account, NRI (Non resident of India) Account, Foreign Currency Non Resident Account etc.

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