Banking Study Material Types of Accounts

Banking Awareness Study Material

Types of Accounts

• Fixed Deposit Account or Time Deposit Account :
  Cash is deposited in this account for a fixed period. This is not transferable. If the depositor stands in need of the amount before the expiry of the fixed period, he can withdraw the same after paying the discount to the bank.This type of deposit attracts high rate of interest. Longer the period of deposit higher is the rate of interest. It is also called Time Liability of the bank.



• Current Account or Demand Deposit Account :
  A depositor can deposit his funds any number of times he likes and can also withdraw the same any number of times he wishes. Ordinarily, businessmen deposit their funds in this account. Generally, no interest is paid by the bank on this account. The bank demands some charges from the depositors if the amount lying in the account falls below the minimum limit.



• Savings Account :
  On this account, restrictions are imposed by the bank on the amount to be withdrawn by the depositor. If the latter wants to withdraw more money than is allowed, then he has to give prior notice to the bank. Bank pays interest on this account although its rate is less than the rate of interest paid on fixed account.



• Recurring Deposit Account :
  Under this account, a specified amount is deposited every month for a specific period, such as 12, 24, 36, or 60 months. This amount cannot be withdrawn before the expiry of the given period except under exceptional circumstances. Interest on the amount deposited is also credited to the account of the depositor. Like time deposit account, interest paid on this account is higher than other accounts.



• Demat Account :
  Demat refers to a dematerialized account. Demat account is just like a bank account where actual money is replaced by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open a demat account in order to buy or sell shares.