Types
of Accounts/ Deposits:
Every
bank provides basic banking facilities to the customers such as opening of
different types of accounts and keeping their savings in different types of
deposits. Different types of accounts include Savings Account, Current Account
and Term Deposit Account.
1. Saving Accounts: Savings accounts are meant for
encouraging savings habit among the customers and also giving a protected
environment to their savings. A nominal rate of interest is given to all
savings account holders for their savings which is varying from one bank to
another and calculated on daily balance method. Less number of cash withdrawals
is allowed in savings accounts compared to current account.
2. Current Accounts: Current accounts are normally maintained by business people who are keeping their
business earnings which are huge values and banks are not offering any interest
to such current accounts. Numbers of withdrawals from current accounts are not
restricted to current account holders
which is different from bank to bank.
3. Term Deposits: Term Deposits are maintained for the depositors who want to earn fixed return by way
of interest, to keep their money in the banks for long duration and also meant
for those who do not have urgent cash requirements. Term deposits are normally
divided into short term deposits, medium term deposits and long term deposits.
They are otherwise called Fixed Deposits kept for fixed term starting from 15
days to 60 months. The rate of interest on fixed deposits is also different from
one bank to another. Nowadays, some banks are offering additional ½% more
interest to senior citizens. If the deposit holders want to withdraw their
deposits before the due date, they can withdraw them provided banks may charge
penal interest from them. In India, maximum numbers of banks are conducting
most of their banking business such as lending loans and advances out of funds
mobilized from fixed deposits only.
4. Recurring Deposits:
Recurring Deposits are other types of deposits which are also considered as
a term deposits in which a fixed sum of money is regularly deposited at fixed
interval but the same is allowed to withdraw on completion of the contracted
period with attractive interest rates. If the depositor is failed to make the
agreed amount in Recurring Deposit account, the banker may charge penalty at
the time of making the consecutive deposit.
5. Special Term
Deposits: This
can be opened in the same way as the term deposit
accounts. The interest on this account is compounded at quarterly intervals and
the principal and interest are paid on maturity. The minimum and maximum period
of deposits is normally 7 days to 120 months subject to change from one bank to
another and the minimum amount of deposit is Rs.1000/- in multiple of Rs.100/-.
The depositor can avail loan from this account upto 90% of the principal amount
with accrued interest.
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