March 16, 2019

Types of bank accounts

There are mainly four types of bank accounts in India- Saving account, Current account, Recurring account and Fixed account.

(I) Saving Account: This account is opened to encourage people to save money . The saving account holder is allowed to withdraw money from the account on demand. Interest on this account fixed by Reserve bank of India. Maximum limit 50,000 after using Permanent Account Number You can transact more than 50,000.  Minimum amount is nessery to remain account active.                                             

(II) Current Account: Generally this account  is opened by businessman. No transaction limit. No rate of interest paid by banks.                           

(III) Recurring Account: it is term deposit offered by banks. Also known as RD account which help people to deposit a fixed amount every month or specific time period basis. Generally maturity period 6 months to 120 months. Interest  compounded quarterly.                                                                                       
(IV) Fixed Deposit Account: This account is opened for a particular time period ,money is deposited for a fixed period six months, one year, five years, ten years etc. Account holder earn higher rate on this account.  Minimum amount to require 1000 to open FD.     Opened for minimum 15 days and maximum 10 years.                                                                                                 
  Some Other Accounts are also given below-

Demat account: it is opened by company or share holders.  It works as  current account. It is uses as electronically.                                                                                                      
 Dormant Account: The account which is not active at least 2 year is called non active or dormant account.  For reactive KYC ( know your customer) form is necessary.                                                                                                              
NoFrille  Account: it is active account on zero balance,  This account is opened for the person who not generally can't follows rules of banking.                 

Foreign Currency Non-Resident Accounts: RBI allowed Indian to open FCNRA   from November 1 ,1975. This account is opened, chosen converted currency  because by this account can send money from one country to another country.                                                                                                                   
Non-Resident External Rupee Accounts: This account is opened by Non-Resident Indians in machant bank for marketing purpose.                             

Basic Saving Bank Deposit Account(BSBDA): it is issued by reserve bank of India  from August 10,2012, This is generally opened by poor or weaker section of society.  BSBDA is applicable for India banks as well as foreign banks whose branches are setup in India. Maximum balance limit 50,000, ATM transaction 4 time free in a day. Cash withdrawn and transfer can not exceed 10,000 in a month,Total can not exceed 1 lakh in a year, for foreign remittances can not credited to small amount without fulfilling KYC Norms. BSBDA is valid for 12 months but extended  another 12 months if person provides proof officially valid document.    

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