Now, what are bank accounts? Bank accounts are basically a financial account which is maintained by the financial institution to keep the tack of transaction record between them and the customers. Having bank accounts provides a safe treasury of your hard-earned money. In case the bank or the unions are close you are sure to get back your money.
Based on the functionalities, there are various types of bank accounts in India which are savings account, current account, fixed deposit account, demat account, recurring deposit account, and NRI account.
- Savings account: This type of accounts can be owned by an individual or jointly by two people to save money. Banks pay interest on the money that you have saved through a savings account. However, the amount of interest you get via a savings account is very little as compared to the other types of accounts. However, saving accounts are easy to operate and require less maintenance. It also allows a limited number of transactions.
- Current account: Current account is opened by business owners, which usually do not have any daily transaction limit. Current accounts can be opened for associations, companies, institutions, industries, religious institutions, and other business-related works.
- Fixed-deposit account: This account is also not meant for daily transactions. It allows a one-time deposit and one-time withdrawal facility. You have to deposit a lump sum amount for a fixed period of time on which you get a fixed interest rate. The amount of interest is usually higher than the savings amount. The amount can be taken out only after the maturity date.
- DEMAT account: Dematerialized account is shortly known as a DEMAT account. In other words, dematerializing or converting your physical shares in the electronic format is known as holding a DEMAT Account. This type of account is generally utilized to hold the shares and securities of publicly traded institutions in an electronic form. With a Demat account, you can hold a wide variety of investments such as equity shares, bonds, mutual funds, government securities, as well as exchange-traded funds. Similar to a bank account, a Demat account is either debited or credited each time you sell or buy shares of a company. You can open a DEMAT account with various banks such as HDFC, ICICI, and many more.
- NRI Account: Indian banks offer banking facilities to the NRI as well (which stands for Non-Residential Indian). An NRI account refers to the account opened by a Person of India Origin or NRI. NRI accounts can be further classified into three types, i.e., NRO (Non-Resident Ordinary Rupees) Account, NRE (Non-Resident External Rupees) Account, and FCNR (Foreign Currency Non-Resident) Account. To more about the banking system, please do contact us.