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.