Types of Bank Accounts in India: Every commodity and every service nowadays is easily accessible with money. And all of your money can be swiftly transacted via a card or simply cash. But how do we manage this money or keep track of all these monetary transactions? No matter what profession you are in or even a student, your bank account and its statement make money management easy for you. What type of bank account suits you? How many types of bank accounts are there? Let’s find out.
This topic is also important for all the banking aspirants for their general and banking awareness skills. Questions on this topic can also be asked in the upcoming banking examinations. Candidates must read the article mentioned below thoroughly.
Types Of Banks Accounts In India
Banks provide people with a variety of options when looking to open an account which is based on the factors like one’s location, regularity of transactions, purpose serving for the account holder, etc.
This account is a good option for people with a good frequency of transactions as there is no limit on the number of transactions per day. Businesses with a good amount of liquidity for payments and receipts use this type of account.
Being a deposit account, the number of transactions is limited. But it does come with the benefit of a minimum rate of interest which depends on the duration of the account, depositor, etc.
This account is between the employer and the bank where the money gets credited at the beginning of their pay cycle and can be made accessible to the employee.
Fixed Deposit Account
FD accounts help you store money with a good amount of rate of interest. But the money in FD, as the name suggests is locked for a certain amount of time as chosen by the account holder.
Recurring Deposit Account
Unlike the FDs, RD doesn’t require a lump sum amount of money but the investment is done at regular intervals in small amounts. Similar to FDs, the amount of interest will be reduced if withdrawal is done prematurely.
Also known as the overseas account, there are 2 types of NRI Accounts, NRO or non-resident ordinary and NRE non-resident external. Banks also provide FCNR account (foreign currency non-resident) that help you to hold the money in the country’s respective currency.
Types Of Banks Accounts In India: FAQs
Q1- Which account is best for businesses?
Ans- Current accounts are best for business as they are more liquid.
Q2- What is the difference between FDs and RDs?
Ans- In a recurring deposit account, money can be invested in small amounts at regular intervals whereas, in fixed deposit accounts, money is invested in a large amount.