Types of Bank Account in India
The account is used to save money and encourage people to collect their savings. The reserve account holder is allowed to withdraw money from the account when necessary, the interest account of the savings account is determined by the Reserve Bank and it is set at 4.00% (now SBI and United Bank of India is 3.5%) on the basis of daily balance. Reserve Bank is regulating the interest rate of savings fund accounts and now banks are free to decide on some of the conditions prescribed by the RBI.
Features of Saving Accounts –
- There is no limit on the number and amount of deposits. However, in India, the mandatory PAN (Permanent Account Number) statement will be closed for cash transaction of Rs. 50,000.
- Withdrawal is subject to certain restrictions.
- To keep it working, you should keep a minimum amount to save the account.
The current account is mainly used for traders and not for investment or storage purposes.
Features of Current Accounts –
- The main purpose of the Current Account holders to open this account is to enable them (most of the businessmen) to easily manage their business transactions.
- There is no limit on the number of deposits or deposits of cheque / cash deposits; generally banks do not offer any interest in this type of current account.
- Current accounts do not have a fixed duration because they are in continuous accounts.
- Cheque book facility is provided and the account holder can submit all the cheque and drafts in their names or on behalf of the third party on behalf of them.
Recurring Deposit Account (RD):
Recurring Deposit (RD)Account is a specific type of term deposit known as India's RD account, which deposits fixed deposits to their repetitive deposit accounts per month to people with regular income and earn interest at fixed rates applicable to certain deposits.
Features of RD Accounts –
- Recurring deposit accounts are generally approved for maternity from 6 months to 120 months.
- These accounts can be opened in single or joint names. Nomination facilities are also available.
- The interest rate paid is similar to that of a fixed deposit.
- Interest rates on the basis of annual deposits have increased on quarterly basis.
Fixed Deposit Account (FD):
The account is opened for a specific time period (time) with the specified amount (money) which is known as the 'Term (term) Deposit Account'. The term 'Fixed Deposit' means that the deposit is set and is only payable on expiration date. Under the Fixed Deposit Account, the money is deposited for a fixed six months, one year, five years or even ten years. The money collected in this account before the expiry of time cannot be withdrawn.
Features of FD Accounts –
- The main purpose of the Fixed Deposit Account is that individuals are able to earn high interest rates in their surplus funds (additional money).
- Amount can be credited only once. For more such deposits, separate accounts need to be opened.
- Fixed deposits can be open for 15 days and for maximum 10 years.
- The minimum amount required to open a Fixed Deposit is Rs.1000.
- Withdrawal is not allowed. However, in an emergency, the bank allows to close certain accounts before maturity date. In this case, deducts 1% (deduction of deduction percent to many percentages) from that date as payable interest.
Basic Savings Bank Deposit Account (BSBDA):
- According to the guidelines issued by the Reserve Bank of India on August 10, 2012: Any person, including the poor or the weak part of the society, can open a bank's zero balance account. BSBDA guidelines apply to "all scheduled commercial banks in India, branches in foreign countries" in the branches.
- The goal of introduction of 'Basic Savings Bank Deposit Account'(BSBDA) is part of the Reserve Bank's efforts to increase the Financial Inclusion Objectives.
Main Points of BSBDA-Small Accounts –
- In BSBDA, banks are required to provide free of charge minimum 5 withdrawals, through ATMs.
- The total credit of this account will not exceed one lakh rupees per year.
- The maximum balance of the account will not exceed Rs. 50,000 at any time
- Total debit will not exceed Rs. 10,000 rupees in a month through cash withdrawal and transfer.
- Without fully paying KYC formalities, foreign money cannot be transmitted to small accounts.
- Small accounts are valid for the 12-month period in the initial stages, which can be extended within 12 months, if a person is formally applying for a valid document.