Types of Banking Product in India

Saving Bank Account:

A Savings bank account is the operating account for individuals and others for non-commercial transactions. A Savings account helps the account holder to do day-to-day banking transaction. The account holder also earns interest on the balance lying in this account.

General Features of Saving Bank Account:

·         Mode of Operation: Single and/or Jointly

·         Minimum Balance: Mostly Required. In case of Salary Account, minimum balance is generally waived.

·         Mode of Transactions: Cheque, Cash, Internet Banking, Mobile Banking, ATM, Debit Card.

·         Nomination Facility: Yes

·         Earned Interest: Yes. Interest rate p.a. is 3.5% to 6%

·         No. of transactions in a month: Generally number of withdrawal and deposits are restricted. Charges are applicable on any transactions beyond the restricted number.

·         Account Maintenance Charges : No

Current Bank Account

A Current bank account is the operating account for commercial transactions. A Current account helps the account holder to do day-to-day banking transaction generally without any restrictions. As these accounts are commercial in nature & considering the large number of transactions in the account and volatile nature of balances maintained overnight banks generally levy certain service charges for operating a Current account.

General Features of Current Bank Account:

·         Mode of Operation: Businesses

·         Minimum Balance: Mostly Required. Banks generally insist on a higher minimum balance to be maintained in current account.

·         Mode of Transactions: Cheque, Cash, Internet Banking, Mobile Banking.

·         Nomination Facility: No

·         Earned Interest: No

·         No. of transactions in a month: Generally number of withdrawal and deposits are unrestricted.

·         Account Maintenance Charges : Yes

Fixed Deposit Account

As the name suggests, Fixed Deposit Account are term deposit accounts. The interest rate, amount of fixed deposit & tenure is agreed and decided at the time of opening of Fixed Deposit Account. The duration of Fixed Deposit is min 15 days to 10 yrs. Generally, penalty is levied for premature encashment of deposits.

General Features of Fixed Deposit Account:

·         Mode of Operation: Individual as well as Businesses

·         Minimum Balance: Not Applicable

·         Mode of Transactions: Cheque, Cash, Internet Banking, Mobile Banking.

·         Nomination Facility: Yes

·         Earned Interest: Yes. Higher interest rate than Saving Account.

·         No. of transactions in a month: Not Applicable

·         Account Maintenance Charges : No

Recurring Deposit Account

Recurring Deposit Account are also term deposit accounts but are different from Fixed Deposit Account. In case of recurring deposit account, the depositor can do multiple deposits unlike the fixed deposit where in each deposit is treated as new Fixed Deposit. The interest rate, amount of fixed deposit & tenure is agreed and decided at the time of opening of Recurring Deposit Account. The duration of recurring deposit is min 6 months to 10 yrs. Generally, penalty is levied for premature encashment of deposits.

General Features of Recurring Deposit Account:

·         Mode of Operation: Individual as well as Businesses

·         Minimum Balance: Not Applicable

·         Mode of Transactions: Cheque, Cash, Internet Banking, Mobile Banking.

·         Nomination Facility: Yes

·         Earned Interest: Yes. Higher interest rate than Saving Account.

·         No. of transactions in a month: Not Applicable

·         Account Maintenance Charges : No

Nalin Bhandari

Chartered Accountant

Cell:+919930018666