Banks in India traditionally have four types of accounts which are namely Current Account, Saving Account, Recurring Deposits, and Fixed Deposits. But, in recent years, due to increasing competition, some of the banks have introduced new different products combining the features of the above two or more types of deposit account. They appear to be with different names in different banks and have not been very popular among the public. Yet, here is the list of the most common types of bank accounts in India.
1. Savings Account:
A Saving account is that account which is provided by a bank for individuals to save money and earn interest on the cash held or saved in the account. The facility is given to salaried persons or the persons who have a fixed regular income as well as to students, senior citizens, pensioners, and so on. Advantage of Saving account is that its passbook acts as an identity and residential proof of the account holder.
2. Current Account:
The current bank account is also known as Demand Deposit Account is an account that is opened by businessmen who have a higher number of regular transactions with the bank, including deposits, withdrawals, and contra transactions. It can be opened in a co-operative bank and commercial bank. The amount in this account can be deposited and withdrawn at any time without giving any notice.
3. Recurring Deposit Account:
A recurring deposit account is that account which is opened for a purpose to be served at a future date. It is opened by those who want to save regularly for a certain period of time and earn a higher interest rate to finance pre-planned future purposes like, wedding expenses of children, purchase of costly items like land, houses, luxury car, etc. This account encourages regular savings habit among the people.
4. Fixed Deposit Account:
Fixed Deposit Account is an account opened for a particular fixed period (time) by depositing a particular amount (money). The term ‘fixed deposit’ itself describes it that the amount is fixed and is repayable only after a specific period is over or say the amount cannot be withdrawn before the expiry of the period. The advantage of a fixed deposit is that it indirectly boost the economic development of the country.
5. Joint Account:
The account that belongs to more than one person is known as Joint Account. These accounts are usually set up by couples who are living together or people who have finances that are closely linked. Other types of accounts like, current and savings accounts, can be opened jointly. This account can be set up so each individual account holder can use the account. With this account, now you are liable for any debts run up by other account holders.
6. Student Account:
There are many banks that provide accounts specifically for students in higher education. These are current accounts designed with student finance in mind which usually offer interest-free overdrafts up to a certain limit to help students cope with the debts that often accumulate while studying.
So friends, these are all Top 6 Types of bank accounts in India. I hope that you have liked this type of bank accounts in India, and this article will be useful for you.