In India, you will come across banks falling under any four categories. They are co-operative banks, foreign banks, nationalized banks, public-sector banks and private banks. You have the option to open an bank accounts in one of these categories in India. To open an bank-account in India, you should have a PAN number and Aadhaar Card.
Below Are The Types Of Bank Accounts In India!
Irrespective of whether you are a college student, a housewife or a business house or an entrepreneur, you can open a bank accounts in India. Even, a retired person or an Indian living abroad can open a bank accounts. Banks offer different types of bank accounts to meet different purposes of customers. Based on your location, frequency of transaction and purpose, Indian banks offer different options to choose from. Here is the list of types:
- Savings Account
- Current Account
- Salary Account
- Fixed Deposit Account
- Recurring Deposit Account
Details On The Different Types of Indian Bank Accounts
Savings Account: With a Savings Account with a bank, you can save money. To open a savings account, you should have a PAN Card and Aadhar Card. These are mandatory documents to open this account. Here are some details to know about this account:
- There is no restriction on the amount of money you can hold in a savings account. Based on the bank, the number of transactions may be capped.
- Most banks have made it compulsory that an account holder should maintain a particular minimum balance in savings account. This minimum balance differs from one bank to another.
- For some selected accounts like Pradhan Mantri Jan Dhan Yojana. In this case, an account holder need not maintain any minimum balance. However, withdrawals from this account are capped four times per month. This includes even ATM withdrawals.
- The interest you can earn from a savings bank accounts differs from one bank to another. For instance, in India’s largest Public Sector Banks the SBI, for an account balance of up to INR 1 lakh, the interest rate is 2.70%. when you take the case of India’s largest private sector banks HDFC bank, for an account balance of below INR 50 lakh, the interest rate is 3%.
- The biggest benefit of a Savings Account is that it is the best option to earn interest on idle money lying in banks.
Current Account:
A current account is not for individuals. But, it is for corporations and businesses. To open this account, you need a PAN Card, certificate of incorporation, AOA and MOA, a certificate issued by service tax and sales tax authorities. Also, you need address proof of your business and ID and address proof of partners/directors. Also, you need the business owner’s photograph.
- You do not have any restriction on the utmost money you can hold in this account.
- In general, the minimum balance to be maintained in the current account varies from one bank to another. But, the thing to remember here is that the minimum balance to be maintained is generally higher than the savings account.
- Banks do not pay any interest on current accounts
- The biggest benefit associated with a current account is its overdraft facility. Also, you can enjoy a number of daily transactions with this account. Even, with an overdraft facility, you can gain access to a credit facility with your current account even when the balance is low. You can fund your business finance needs with the money you borrow through the overdraft facility offered by your current account.
Salary Account:
As per the agreement between a bank and an employer, a salary account is opened. The employer credits the salary of an employee to his salary account every month. Here are some key features of a salary account:
- Salary account holders do not have to compulsorily maintain any minimum balance in most banks in India
- Banks pay interest to salary account holding customers. However, this interest rate varies from one bank to another.
- For salary account holders, most banks offer cheque books, credit cards, debit and ATM Cards. Also, banks these days offer mobile banking and internet banking facility to salary account holders. Also, the charges for online fund transfers including RTGS, IMPS and NEFT are at lower rates for salary account holders.
- For this account, some banks even offer overdraft facilities.
- You can make bill payments through your salary account
- For home loans and personal loans, you can get preferential pricing when you have a salary account.
Fixed Deposit Account:
You might have heard about fixed deposits. But, you might wonder what are fixed deposit accounts. These are bank accounts offered by banks for customers with a lump-sum extra/idle cash. This is particularly for those without any issues of locking the lump sum for a specific term. The term can range from one to even 10 years:
- Fixed deposit account holders generally get higher interest rates. Their interest rates will be higher as compared to regular savings account holders.
- The principal amount deposited by the account holder will remain untouched in this account. This is why it is considered one of the safest options for those looking to invest their money in a safe place.
- The biggest benefit of this account is that you can earn better interest as against keeping your money in the regular savings account.
Recurring Deposit Account:
This is a special kind of account, where you need not have to deposit a lump sum amount like a fixed deposit account. Rather, you will have to deposit a fixed amount every month. It means that you need not have to worry about depositing huge money every month. It can be as little as Rs.100.
- The interest rates for recurring deposit accounts vary from one bank to another. In general, it can be somewhere between 5 to 7%.
- The maturity time varies from 6 months to 120 months for this type of account. Even, you can order your bank to withdraw a particular amount of money every month.
- The benefit of this account is that you can take a loan of about 80 to 90% of the money you deposit.
Apart from the above-mentioned types of accounts, there is another type of account for Non-resident Indians. This account is called called NRI account. It is further classified into Non-Resident External Savings Account or Fixed Deposit Account, Non-Resident Ordinary Savings Account or Fixed Deposit Account and Foreign Currency Non-Resident Account. Irrespective of the type you choose, holding a bank accounts will improve the habit of saving money, which is good for your future.
