Types of Bank Accounts

Category: Education

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class 11th commerce types of Bank a/c


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Types of Bank Accounts: 

Types of Bank Accounts Saving,recurring ,Current ,Fixed deposit ,Multiple option deposit a/c

Recurring Deposit-RD: 

Recurring Deposits are a special kind of Term Deposits offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits . It is similar to making FDs of a certain amount in monthly installments, for example Rs 1000 every month. This deposit matures on a specific date in the future along with all the deposits made every month. Thus, Recurring Deposit schemes allow customers with an opportunity to build up their savings through regular monthly deposits of fixed sum over a fixed period of time. The Recurring Deposit can be funded by Standing instructions which are the instructions by the customer to the bank to withdraw a certain sum of money from his Savings/ Current account and credit to the Recurring Deposit every month. When the RD account is opened, the maturity value is indicated to the customer assuming that the monthly instalments will be paid regularly on due dates. If any instalment is delayed, the interest payable in the account will be reduced and will not be sufficient to reach the maturity value. Therefore, the difference in interest will be deducted from the maturity value as a penalty. The rate of penalty will be fixed upfront. To calculate the maturity value of a reoccurring deposit account, there is a formula used by banks. Recurring Deposit-RD


A Fixed Deposit (also known as FD) is a financial instrument provided by Indian banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date . It may or may not require the creation of a separate account. It is known as a Term Deposit in the Canada, Australia, New Zealand and the US and as Bond in United Kingdom they are considered to be very safe investments. Term Deposits in India is used to denote a larger class of investments with varying levels of liquidity. The defining criteria for a Fixed Deposit is that the money cannot be withdrawn for the FD as against Recurring deposit or Demand deposit before maturity. Some banks may offer additional services to FD holders such as loans against FD certificates at competent interest rates. Its important to note that banks may offer lesser interest rates under uncertain economic conditions. The interest rate varies between 4 and 11 percent. [1] The tenure of an FD can vary from 10, 15 or 45 days to 1.5 years and can be as high as 10 years. [2] These investments are safer than Post Office Schemes as they are covered under Deposit Insurance & Credit Guarantee Scheme of India. They also offer Income tax and Wealth tax benefits. FIXED DEPOSIT-FD


Current A/c is opened by A businessman who have a no. of regular transactions with the bank both deposit and withdrawals. It is also known as demand deposit. Current account can be opened in co-operative bank and commercial bank. Incurrent account, amount can be deposited and withdrawn at any time without giving any notice. It is also suitable for making payments to creditors by using cheques . Cheques received from customers can be deposited in this account for collection. In India, current account can be opened by depositing Rs.500 (US $ 11) to Rs.1,000 (US $ 22). The customers are allowed to withdraw the amount with cheques and they generally do not get any interest. In India Co-operative bankmay allow interest upto 1%. Current account holder get one important advantage of overdraft facility CurrentA /C

PowerPoint Presentation: 

Features of Current Bank Account ↓ The main features of current account are as follows:- The main objective of current bank account is to enable the businessmen to conduct their business transactions smoothly. There is no restriction on the number and amount of deposits. There is also no restriction on the withdrawals. Generally bank does not pay any interest on current account. Nowadays, some banks do pay interest on current accounts. Current account is of continuing nature and as such there is no fixed period.

PowerPoint Presentation: 

Meaning of Saving Account in Bank ↓ Commercial banks , co-operative banks and postal departments accept deposits by way of opening saving bank account. The 'saving account' is generally opened in bank by salaried persons or by the persons who have a fixed regular income. Saving a/c are opened to encourage the people to save money and collect their savings. In India, saving account can be opened by depositing Rs.100 (US $2.19) to Rs.500 (US $11). The saving account holder is allowed to withdraw money from the account two times or three times in a week. The interest which is given on saving accounts is sometime attractive, but often nominal. At present, the rate of interest is 3.50% p.a in India. The interest rates varies as per amount of money deposited and its maturity range. It is also subject to current trend of banking policies in a country.

Multiple option deposit A/c : 

Multiple option deposit A/c Multi Option Deposit Scheme is a term deposit which is not fixed at all and comes with a unique break-up facility which provides full liquidity as well as benefit of higher rate of interest, through the savings bank account. One can also keep that deposit intact by availing an overdraft facility, to meet occasional temporary funds requirements. Individual banks have their own deposit schemes to suit the current as well as future needs of the people. You may visit nearby branches of the banks and collect information about different types of deposit accounts to ascertain the comparative advantages and limitations of the different types of deposit schemes.

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