Types of Accounts: Banking Awareness Special Series

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Team Adda247 and Bankers Adda have introduced a Special Banking Awareness series for SBI and IBPS Interviews 2021. In this series, we will be introducing the candidates with some banking awareness topics On a daily basis that will improve their general awareness and will also ensure that the candidates do not lack in any banking term when it comes to the interview round. Today the topic of our Banking Awareness Series is Types of Accounts. To know more about this banking awareness special series click on the link below

Banking Awareness Special Series For SBI & IBPS Interviews 2021

Types of Accounts

Recurring Deposit Account: In a Recurring account, the Customer can invest his fixed sum of money on regular basis like every month or once a quarter. In FD customer have to put all their money at once a time, but in Recurring, he needs to invest his money in smaller and more frequent way. The tenure of the RD cannot be changed even customer can withdraw money after the maturity period completed.

Generally, Recurring Deposit has a maturity period between 6 months to a maximum of 10 years. The rate of interest on RD less than the rate of interest on FD but more than the rate of interest on the Savings account

I.e. Rate of Interest low to high – Savings Account < Recurring Deposit < Fixed Deposit

NRI Accounts: There are different types of bank accounts for Indians or Indian-origin people living outside India.

(i) NRO (Non-Resident Ordinary) Accounts: NRO Accounts has two category NRO savings accounts and NRO fixed deposit accounts. When Non-Resident Indian (NRI) deposit money in foreign currency in this account, it is converted into INR (Indian national rupee). NRI can park his money earned in India as well as overseas in NRO bank accounts. The income earned is taxable on this deposit account.

(ii) NRE (Non- Resident External) Accounts: NRE Accounts has also categories of savings and fixed deposit accounts. Like NRO account, funds are converted in INR at the prevailing exchange rate. In NRE accounts one can park only his earnings from abroad and the funds, both principal and interest earned on it, are transferable.

(iii) Foreign currency non-resident (FCNR) account: FCNR account is maintained in foreign currency, not in INR. The funds, the principal, and interest earned from this account are transferable, but the interest in not taxed in India.