Do You Know The Different Types of Bank Accounts in India?

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.