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Type of Bank Accounts

Whether you are a housewife, student, NRI or a working employee having a bank account is a must. It is considered one of the best financial products to save, invest and grow your funds. In the present times, banks have come up with a varied range of account types to fit the needs and requirements of their clients. Each account has its distinct quality and characteristics as suited to the clients.
This article will throw light on some of the most common and varied types of bank accounts that you can open to save, invest, and grow your funds.

1. Current Account

The Current account is used primarily by business proprietors or corporations. Banks do not pay any interest on these types of bank accounts. There is no set cap or limit on the maximum funds that you can reserve in this bank account.
Clients who own such types of bank accounts also enjoy a higher number of daily transactions than many other accounts. A major characteristic of this account is its Overdraft Facility. This feature helps the account holders to access a credit facility, even when the account balances in the account are comparatively low. It can be used in the time of business needs.

2. Savings Account

A savings bank account is a traditional fund deposit account in which you gain a minimum interest rate. In a savings account, the number of transactions that an account holder you can make every month is capped. Banks and financial institutions in India present a varied range of Savings Accounts based on the kind of client, product features, age, the objective of holding the account, etc.
There are several types of savings accounts as well including – zero-balance account online, Traditional savings accounts, Savings accounts for kids, Senior citizen’s savings account, Women’s savings account etc.

3. Salary Account

As the name of the bank account suggests, a salary bank account is where your employer credits your salary each month. Employers generally tie-up with one renowned and trustworthy bank, and open accounts for all their employees are opened by employers. Salary accounts are zero balance accounts so that an individual can withdraw all the funds deposited in the particular account.

4. Fixed Deposit (FD) Account

There are different types of accounts like fixed deposits and recurring deposits to park your funds and earn a decent rate of interest on it.

A fixed deposit (FD) account permits an account holder to gain a fixed interest rate for maintaining a particular sum of funds sealed in for a given period time (until the Fixed Deposit matures). FDs in India vary from a maturity period of about seven days to as long as ten years, and the interest rate that is earned on FDs will differ depending on the term of the FD. Typically, an individual can’t withdraw money from an FD before it matures; however, some national banks offer a premature withdrawal facility with lower interest rates.

5. Recurring Deposit (RD) Account

A Recurring Deposit (RD) offers you the flexibility to invest your funds each month rather than investing a solid amount at once. Banks and financial institutions in India offer terms usually from 6 months to 10 years.
On the other hand, in FD, the interest gets credited every quarter or at the time of maturity; the interest is strictly paid in an RD. You can ask your bank to debit the monthly RD amount from your account and save yourself from the hassle of paying each month. An account holder should also maintain adequate balances in the bank account so that it is easy for the bank to debit the sums on the set date.

6. NRI Account

There are varied kinds of bank accounts for Indian or Indian-origin people living in a foreign land. These types of bank accounts are called overseas accounts, or in some cases, NRI accounts. NRI accounts possess two types of savings accounts and fixed deposits: NRO (non-resident ordinary) and NRE (non-resident external accounts). These accounts help the NRI’s to save and invest n=money in such accounts. Click here for more details Here.

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