What are the different types of Bank Accounts in India? There are are basically four types of Bank Accounts in India. They are:
Savings Account: A savings account is a type of account provided by every bank to its customers. It is provided by the bank for people to save money and earn interest on the cash in the account. Savings account is made for the general public ,especially salaried people. The main goal of having a savings account is to cultivate the habit of saving among people. Banks also pay interest on the savings account(generally 3.5% -7% is provided depending upon the bank). However, there are restrictions on the number of withdrawals that can be made through a savings account, and therefore this type of account is not suitable for businessmen. Generally, customers must maintain a certain minimum balance in the account. If the minimum balance is not maintained, the minimum balance fee will be deducted from the customer’s savings account. Cheque Book, Internet banking, Mobile banking, Debit Card/Credit Card/ATM Card facilities are provided to Saving Bank Account Holders.
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Current Account: Current Account account is generally intended for businessmen. This is because they have a high frequency of bank transactions. Under this account, there is no restriction on the number of withdrawals and is therefore more suitable for businessmen. Banks do not pay interest on such accounts. But the Bank charges amount for Current Account holders. Some checking account holders also have overdraft facilities. Customer gets the checkbook facility for checking account. Internet banking, Mobile banking, Debit Card/Credit Card/ATM Card facilities are provided to Current Account Holders.
Recurring Deposit: This type of account is also called a cumulative term deposit account. It is intended to cultivate the habit of saving in the economically weakest section of society. Under this type of account, the customer can deposit a certain small but fixed amount (Rs.50, Rs.100, Rs.500, etc.) every month for a fixed period of time. The client recovers the total amount deposited together with the interest at the end of the specified period. The checkbook facility is not granted to recurring deposit account holders.
Fixed Deposit: Under this type of account, the client makes a lump sum deposit for a fixed period of time generally from 3 years to 10 years. The client cannot withdraw the amount during this period. But currently, most banks allow premature withdrawals with a smaller penalty. However, you can take a temporary loan against the fixed deposit receipt (FDR). At the end of the fixed period, the client can withdraw the amount or renew the fixed deposit.