Dear all welcome to DayToDay GK, here we want to share some knowledge regarding bank accounts which is important to all the peoples to get updated about the facts as an account holders.
In India, there are four types of bank accounts:
- Current Account
- Savings Account
- Recurring Deposits
- Fixed Deposits
1. Current accounts are basically used by businessmen who make frequent transactions from the bank in a single day as current accounts are the most liquid accounts which have no limit on the number of transactions carried out per day. These accounts are never used for the purpose of savings or any other purpose since they are highly liquid accounts. Also, most of the current accounts are named after a firm/company and the bank pays no interest on these accounts. In fact, the bank charges certain service charges on these accounts.
2.The savings account is the most popular account used by individuals. Most of you must be carrying out transactions regularly from your savings account. These accounts along with providing you with cheque facility, also has flexibility in depositing or withdrawal of funds. Also, the bank pays certain interest on savings account, the public sector banks pay interest up to 4% on savings account and some private banks pay between 6-7% interests on such accounts. Anyone trying to do some savings, even teenagers, can have their accounts made. Although, if the teenager has no parent or guardian who can help with the process of getting a savings account, they might not be aware of how they can go about the process themselves. For more clarity on the subject, “Can you open a bank account at 17 without a parent?” or similar searches might prove insightful to them.
3.This account is more popularly known as R.D and is for the people who don’t have lump sum amount to save but still manage to save a small amount every month. Such deposits made in the recurring deposit account earn interest on the amount which has already been deposited and the interest is received via monthly installments. However, in case of this account, the person has to deposit a fixed amount of money every month and in case of default in payment, a small penalty will have to be paid by the account holder.
Recurring deposits or R.Ds generally have a maturity period of 6 months – 120 months and a pass book is endorsed to the account holder so that he/she can keep a record of all the deposits made and the interest earned. It is vital to note that recurring deposits account has encouraged people to save more money and the person having a recurring deposit can get a loan from the bank
4.The term fixed deposits from many people as people tend to save money through this account. Every bank of India offers fixed deposits schemes with different tenures; in case of this account the maturity date is long term, i.e. ranging from 7 days to 10 years. The fixed deposits account is more popularly called as F.D. In this account, a specific amount is deposited in the account for a fixed time period. The deposit in this account is fixed and it is only after the particular time that this money is available to the depositor. The depositor can earn a high rate of interest by depositing his/her surplus money in the bank. Such accounts indirectly boost the economic development of the country.
The range of interest on a Fixed Deposit account differs in every bank. However, looking at the latest trend, generally private sector and foreign banks are known to pay a higher rate of interest.