Current Account ? Who uses current accounts?
Current Accounts are basically meant for businessmen and are never used for the purpose of investment or savings.
These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day.
Most of the current account are opened in the names of firm / company accounts. Cheque book facility is provided and the account holder can deposit all types of the cheques and drafts in their name or endorsed in their favour by third parties.
No interest is paid by banks on these accounts. On the other hand, banks charges certain service charges, on such accounts.
Features of Current Accounts:
The main objective of Current Account holders in opening these account is to enable them (mostly businessmen) to conduct their business transactions smoothly.
There are no restrictions on the number of times deposit in cash / cheque can be made or the amount of such deposits;
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
The current accounts do not have any fixed maturity as these are on continuous basis accounts
Savings Bank Account ? Who uses Saving Bank Accounts ?
These deposits accounts are one of the most popular deposits for individual accounts. These accounts not only provide cheque facility but also have lot of flexibility for deposits and withdrawal of funds from the account.
Most of the banks have rules for the maximum number of withdrawals in a period and the maximum amount of withdrawal, but hardly any bank enforces these.
What are Recurring Deposit (RD) Accounts:
These are popularly known as RD accounts and are special kind of Term Deposits and are suitable for people who do not have lump sum amount of savings, but are ready to save a small amount every month.
Normally, such deposits earn interest on the amount already deposited (through monthly installments) at the same rates as are applicable for Fixed Deposits / Term Deposits. These are best if you wish to create a fund for your child's education or marriage of your daughter or buy a car without loans or save for the future.
Under these type of deposits, the person has to usually deposit a fixed amount of money every month (usually a minimum of Rs,100/- p.m.).
Any default in payment within the month attracts a small penalty. However, some Banks besides offering a fixed installment RD, have also introduced a flexible / variable RD. Under these flexible RDs the person is allowed to deposit even higher amount of installments, with an upper limit fixed for the same
In case instalment is delayed, the interest payable in the account will be reduced and some nominal penalty charged for default in regular payments.
Premature withdrawal of accumulated amount permitted is usually allowed (however, penalty may be imposed for early withdrawals). These accounts can be opened in single or joint names. Nomination facility is also available.
Salary account:
Among the different types of bank accounts, your salary account is the one you have opened as per the tie-up between your employer and the bank.
This is the account, where salaries of every employee are credited to at the beginning of the pay cycle. Employees can pick their type of salary account based on the features they want.
Fixed deposit account
A fixed deposit (FD) account allows you to earn a fixed rate of interest for keeping a certain sum of money locked in for a given time, that is until the FD matures.
FDs range between a maturity period of seven days to 10 years. The rate of interest you earn on FDs will vary depending on the tenure of the FD.
Generally, you cannot withdraw money from an FD before it matures. Some banks offer a premature withdrawal facility. But in that case, the interest rate you earn is lower.
0 Comments