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.
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 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
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.
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