It is wise to have a basic banking knowledge. The
world runs on it after all. For starters, one can choose to learn the different
bank accounts in India.
Right from Fixed deposit account and current to
how to open savings account online or
at the bank premises; this knowledge will take you a long way.
The first one is without a doubt the savings account. For most, it is the first bank account they
open upon turning 18. With this account, some banks mandate a minimum balance
requirement while some do not. An interest rate is offered on the account
balance but the rate is the bank’s prerogative. However, the interest rate is
taxable. Account holders can avail cheque facility, debit card and overdraft
facility and even make use of internet banking facilities.
The second one is a fixed deposit account or as
most people call it—FD account. Indians consider it the safest investment
instrument in finance because they can deposit a lump sum amount for a certain
period of time in this account and earn interest over it. Interest offered with
an FD account is the highest among all bank accounts. The tenure of this
account ranges from 7 days to 10 years. If the account is broken before
maturity, a charge is levied.
Three, the Recurring Deposit Account. While it
is similar to an FD account in terms of working, it’s target audience is those
who cannot afford to deposit a lump sum amount. The account holder has to
deposit a fixed amount every month. Defaults attract a charge and so does early
withdrawals. The time period can range from 12 months to 120 months.
The fourth is the Current Account. They are
meant mainly for the business folks and hence it is the most liquid—no limit on
transactions. Firms and companies are the common account holders. No interest
is paid and cheque and overdraft facility is provided. Required minimum account
balance is often higher than a savings
account.
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