subject: Three Main Types Of Bank Accounts [print this page] There are different types of accounts which can be opened: savings deposit accounts, current deposit accounts, fixed deposit accounts, recurring deposit accounts, home safe accounts, etc. Here is a list of three accounts which are most commonly opened:
1) Savings deposit account: a savings deposit account is the most commonly used account by the public in India. A savings deposit account doesn't attract much interest like fixed and recurring deposit accounts. In this type of account, the account holder can deposit money whenever he or she has some money to spare. There is no restriction as to how much can be deposited into the account. A customer can deposit or withdraw money whenever the need to do so arises. The main purpose of a savings deposit account is to encourage small savings among customers. The ease of deposits and withdrawals make it the most preferred account type for everyday expenses.
2) Current deposit accounts: Current deposit accounts are mainly maintained by businessmen and tradesmen who make transactions on daily basis. Traders need to make a number of payments in daily basis for various transactions. The holder of a current deposit account can withdraw as much money as he want as many time as he wants (this is the main reason why this account is most suitable for business men and traders).
3) Recurring deposit accounts: A recurring deposit account is an account in which a particular amount is deposited into the account every month for a fixed tenure. Till the term of the scheme expires, the holder of the current deposit account deposits the required amount into the account on a monthly basis. When the term of the scheme expires, the depositor will receive the amount which he deposited along with the interest which accumulated on the amount. The interest given on recurring deposit schemes is quite high compared to the interest given on other accounts. There is only one other type of account which offers higher rate of interest and that is a fixed deposit account.
Considering how they work, current deposit accounts are mainly opened by people who belong to the fixed income group. The fixed income will enable them to deposit a fixed amount of saving into the deposit account every month. The amount which is deposit into the account cannot be withdrawn before the expiry of the term. In cases where there is an urgent need to withdraw the money, the depositor will lose some part of it as it will be charged as a penalty for breaking the deal.
