TYPES OF BANK ACCOUNTS IN INDIA
GENERAL AWARENESS STUDY NOTES FOR BANK EXAMS
You know that BANKING AND GENERAL AWARENESS section is most important in bank
exams in PO and Clerk and for
other competitive exam. If you want good score in bank exam then you have to score
good in general awareness section. The questions in this section given from
current affairs and static GK form Indian banking System. So we are providing
the static GK (banking GK) for bank exams. It will be very helpful in exam, you
should study General Awareness from www.GovtJobsPortal.in, stay updated as well as prepare
for General Awareness or banking section
which is given in BANK EXAM SBI AND IBPS. Today’s topic is TYPES OF BANK ACCOUNTS IN INDIA. This
is the one of the most important topic in general awareness section in bank exam.
There are very frequent questions from this part asked in many exams earlier.
Just have an overview and read it carefully, it will be helpful in exam.
TYPES OF BANK ACCOUNTS IN INDIAN BANKS
a)
Savings Bank Account
b)
Current Deposit Account
c)
Fixed Deposit Account
d)
Recurring Deposit Account.
e)
FCNR Deposit Account
f)
NRO Account
g)
NRE Account
Savings
Bank Account in India
This type of account can be
opened with a minimum initial deposit that varies from bank to bank. Money can
be deposited any time in this account. Withdrawals can be made either by
signing a withdrawal form or by issuing a cheque or by using ATM card. Normally
banks put some restriction on the number of withdrawal from this account.
Interest is allowed on the balance of deposit in the account. The rate of
interest on savings bank account varies from bank to bank and also changes from
time to time. A minimum balance has to be maintained in the account as
prescribed by the bank. Interest rate is paid to the account holders on daily
balance basis.
Current
Deposit Account
This type of bank account used to save current deposits. Big
businessmen, companies and institutions such as schools, colleges, and
hospitals have to make payment through their bank accounts. Since there are
restrictions on number of withdrawals from savings bank account, that type of
account is not suitable for them. They need to have an account from which
withdrawal can be made any number of times. Banks open current account for
them. On this deposit bank does not pay any interest on the balances. Rather
the account holder pays certain amount each year as operational charge. For the
convenience of the account holders banks also allow withdrawal of amounts in
excess of the balance of deposit. This facility is known as overdraft facility.
Features
of Current Accounts :
(a) The main objective of
Current Account holders in opening these account is to enable them (mostly
businessmen) to conduct their business transactions smoothly.
(b) There are no restrictions on
the number of times deposit in cash / cheque can be made or the amount of such
deposits;
(c) Usually banks do not
have any interest on such current accounts. However, in recent
times some banks have introduced special current accounts where interest (as
per banks' own guidelines) is paid
(d) The current accounts do not
have any fixed maturity as these are on continuous basis accounts
Fixed
Deposit Account (also known as Term Deposit Account)
This type of
bank account in India used to save money for long period. Many a time people want to save
money for long period. If money is deposited in savings bank account, banks
allow a lower rate of interest. Therefore, money is deposited in a fixed
deposit account to earn interest at a higher rate.
Recurring
Deposit Account
This type of account is suitable
for those who can save regularly and expect to earn a fair return on the
deposits over a period of time. While opening the account a person has to agree
to deposit a fixed amount once in a month for a certain period. The total
deposit along with the interest therein is payable on maturity. However, the
depositor can also be allowed to close the account before its maturity and get
back the money along with the interest till that period. The rate of interest
allowed on the deposits is higher than that on a savings bank deposit but lower
than the rate allowed on a fixed deposit for the same period.
NRO
Deposit Account
NRO stand for Non
Resident Ordinary saving account
The Non Resident Ordinary Account
(NRO Account) is a Savings / Current. Recurring Deposit / Fixed Deposit bank
account held in India, in Indian Rupees. NRO account is opened by any
person resident outside India only who want to earn attractive rate of
interest in India and also have some earnings in India (such as rent income,
dividend, pension, etc).This account is best suited for NRI or PIO who have
some earnings in India as these earnings are deposit in NRO account .NRO
account is only operated in Indian currency only .Average monthly balance in
NRO saving account is Rs1,50,000. NRIs can remit up to 1 million per calendar
year. Banks are free to determine their interest rates on savings deposits
under Ordinary Non-Resident (NRO) Accounts. However, interest rates offered by
banks on NRO deposits cannot be higher than those offered by them on comparable
domestic rupee deposits
NRE
Account
NRE stands for Non Resident
External Account. The Non Resident External Account (NRE Account) is a Savings
/ Current. Recurring Deposit / Fixed Deposit bank account held in India, in
Indian Rupees. Such accounts can be opened only by the NRI. Balances held in
NRE account are fully repairable. With effect from March 1, 2014, interest rates
offered by banks on NRE deposits cannot be higher than those offered by them on
comparable domestic rupee deposits
Notes:
a) Minimum age to open a bank
account is now 10 years.
b) Maximum Interest rate is given
on FD A/c.
c) The maximum period of an FD is
10 years & for RD is 5 years.
