Types of Bank Accounts and Bank Deposits in India

India's banking system offers a diverse range of accounts in 2024 to cater the financial needs of individuals, businesses, and organizations. These accounts serve as a repository for depositing and withdrawing funds, earning interest, and conducting various financial transactions. Understanding the different types of bank accounts in India is crucial for managing personal finances, conducting business transactions, and achieving financial goals.

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Types of Bank Accounts in India

The following table outlines the types of bank accounts in India:

Type of Bank Account	Features
Savings Bank Account	Basic deposit account offered by banks Intended for individuals to store and save their money Earns interest on the deposited amount Typically has withdrawal and transaction limits Primarily used for personal savings and day-to-day transactions
Current Account	Designed for businesses and corporate entities Used to manage day-to-day financial transactions Usually has higher transaction limits May or may not earn interest on the deposited amount Used for frequent transactions such as payments to suppliers, clients, and employees Often comes with features such as overdraft facilities and chequebook issuance
NRI Account	A bank account designed for Non-Resident Indians (NRIs), who are Indian citizens living abroad Allows NRIs to deposit and manage their income earned outside of India and also provides various investment options
Demat Account	A type of account used for holding and transacting securities in electronic form, eliminating the need for physical certificates Primarily used for buying, selling, and transferring stocks, bonds, and other securities.
Senior Citizen Account	A bank account specifically designed for senior citizens, typically above the age of 60 or 65 years, offering special benefits such as higher interest rates in fixed deposits, lower fees, and exclusive privileges
Foreign Currency Non-Resident (FCNR) Account	A type of fixed deposit account denominated in foreign currency Allows NRIs to park their foreign earnings in India and earn interest in the respective foreign currency
Salary Account	An account offered by employers to their employees for crediting their salaries Usually comes with features such as zero balance requirement, higher withdrawal limits, and additional benefits like insurance coverage and discounts on various services

Types of Bank Deposits in India

Recurring Deposit:
- Special type of account where you deposit a fixed amount every month instead of a lump sum amount, with a minimum deposit as low as Rs. 100
- Ideal for incorporating a habit of savings
- Interest rate offered varies from bank to bank, ranging from 5% to 7%, with different rates for senior citizens
- Maturity ranges from six months to 120 months, depending on the bank
- Monthly installments can be credited to the Recurring Deposit account through an order to the bank
- Penalty may be charged for delay in installment payment
- RD account allows for taking a loan up to 80% to 90% of the deposit amount
- No facility for premature withdrawal
- Penalty may be applicable for closing the account before maturity
Fixed Deposit:
- Fixed deposit is an investment instrument offered by banks, financial institutions, and non-banking financial companies.
- With the fixed deposit, money is deposited for a fixed tenure and guaranteed returns are provided.
- The FD interest rates range from 5% to 9%, higher than savings account interest rates.
- Tenure for fixed deposit ranges from 7 days to 10 years.
- Some banks offer fixed deposits with a tax exemption of up to Rs. 1,50,000 under Section 80C of the Income Tax Act, 1961.
- Interest amount below Rs. 40,000 is tax-free, while interest amount above Rs. 40,000 is subject to TDS.
- Premature withdrawal of fixed deposit is not allowed, but the account can be closed early with a penalty.
- Fixed deposit is a safe investment option for building a saving habit and offers guaranteed returns.

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Summing It Up!

Today, people in India can easily manage personal finances as different types of bank accounts are available. In addition, multiple types of fixed deposits are available for Indian citizens to save and grow their investments.

With technology advancements, banking has become more accessible and convenient that allows individuals to have greater control over their money and achieve financial objectives.

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
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