Introduction
Money has become a major part of our life. To keep this money safe and secure, we go to the bank. There we need to store it as a deposit in our account. Thus, we all are aware that the basic provision of any bank is giving an account to the customer to maintain a bank deposit. Though it seems to be simple, it is a vast topic. Let's have a detailed discussion on types of deposits and accounts along with the features and benefits of each account.
Types of Deposit and Accounts
We use banks for the smooth flow of day-to-day transactions, saving money with safety and security. We can open an account either in public or in private banks. We have various types of deposits based on the type of account. Let's see multiple types of accounts provided by banks commonly.
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Savings Bank Account:- Savings bank account is a common account that any individual or a joint account can open by two people. It is the major type of deposit for saving money. Here the bank pays interest to the account holder. It is of two types.
Basic Savings Bank Deposit Account (BSBDA)
Basic Saving Bank Deposit Accounts Small Scheme(BSBDS)
Highlights of the Savings Bank Account:-
It doesn't have a maximum limit on the amount of deposit and the number of times. But, there is a restriction on minimum amount and withdrawal times.
The annual rate of interest will be credited to the account, and it may vary by change in RBI rules.
The savings bank account holder will get a debit or Rupay or any other ATM card to do transactions online or at ATM centres.
Current Bank Account:- Another famous type of deposit is the current deposit account. It is not meant for a savings scheme. It is purely business operations.
Highlights of Current Deposit Account:-
These types of deposits and accounts are opened by companies, educational institutions, hospitals, religious entities etc for day to day operations.
They don't have limits and restrictions for both deposits and withdrawals.
The current account holders can avail online banking services.
Bank won't pay interest but gives overdraft benefits.
Recurring Deposit Account:- The short form of a recurring deposit account is RD. It is another type of deposit where the account holder needs to deposit some fixed amount for every month.
Highlights of Recurring Deposit Account:-
These types of deposits are useful for both individuals and organizations. They are like periodic deposits for saving money as a regular habit.
The bank pays interest and provides a passbook.
The monthly instalment starts from a minimum of 50/- and no maximum limit for a minimum of six months and so on.
Premature withdrawals, loans, allocation of nominees etc were available.
Fixed Deposit Account:- We commonly know it as FD. It is another type of deposit that allows the account holder to deposit a sum assured for a locking period.
Highlights of Fixed deposit account:-
It is a single time deposit with a desirable locking period.
It helps to restrict ourselves from using or wasting money and provides the whole sum along with interest in the future.
A bond is provided with a maturity date and time to withdraw the amount.
Here also we can mention nominees.
Premature withdrawals are also allowed with loss of interest.
NRI Account:- The NRI accounts are available to provide banking services for non-residential Indians. We have three different types of NRI accounts based on their purpose. They are -
NRO - Non-Resident Ordinary Rupee Account.
NRE - Non-Resident External Rupee Account.
FCNR - Foreign Currency Non-Resident Account.
DEMAT Account:- Dematerialized Account is the full form of a Demat account. It is used to trade shares and securities online.
Highlights of Demat Account:-
Using a Demat account, trading doesn't require much paperwork.
It allows traders to trade from anywhere.
National Securities Depository Limited and Central Depository Services Limited are available to manage these types of deposits and accounts.
It only requires KYC and has low transaction charges.
Conclusion
Thus we have various types of deposits with different types of benefits for the customers. It helps to maintain balanced financial assets with safety and security. After getting detailed information on these accounts, choose the best fit for you.
FAQs on Bank Deposit
1. What is the Significance of Having a Bank Account?
Having a bond account is useful in many ways. Based on the nature of our work, income we can choose the best option among all types of bank accounts to avail its services. Few generalised benefits from the bank accounts are as follows-
Opening and using a bank account is simple and convenient.
Bank accounts are the safest measures to save our heart and money and can get back in future with increased returns.
Online banking allows account holders to do their transactions like shopping, paying bills, trading etc everything can be done by sitting in the home itself.
Easy accessibility to an increased number of ATMs.
Certain types of deposits in bank accounts like a current bank account etc., are providing overdrafts and credit cards to use the money at present and can repair it later with lower interest rates.
Irrespective of the level of income, every individual can save their money through regular instalments using recurring deposit and time deposit schemes of various bank accounts.
2. What are the Various Types of Recurring Deposit Accounts?
Recurring deposit accounts are widely used bank accounts because of their flexibility and convenience to all categories of people. We have three different types of recurring deposit accounts. They are -
Home Safe Account or Money Box Scheme: it is like a kiddy bank for the regular savings scheme. We can save a minimum amount of money regularly, and the bank will store it with maturity. Bank provides the whole amount with added interest after maturity.
Home Construction deposit Scheme/Saving Account: instead of taking a home loan, from the beginning itself, we can save some amount for constructing a home or to buy land etc. In this type of recurring deposit account, the bank provides a higher interest rate for the periodic instalments of saving money.
Cumulative-cum-Sickness deposit Account: it is just like getting medical insurance for business people. We can save a small amount of money for regular intervals of the desired period. After it reaches maturity, the bank provides medical assistance etc.
