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Types of bank accounts in India

Updated: Apr 25, 2023

Banks in India provide a wide variety of account kinds to meet the various demands and specifications of both people and corporations. There is an account type for everyone, ranging from straightforward savings accounts to specialised accounts for certain reasons. We'll talk about some of India's most popular bank account types in this article.

The most fundamental sort of bank account in India is a savings account. It's made for those who wish to deposit money, earn interest on it, and still have quick access to their money. Most banks mandate that a savings account maintain a minimum balance. Savings accounts often offer lower interest rates than other types of accounts.

Current Account: Businesses and corporations are the primary target audience for current accounts. They can conduct their normal business without worrying about the withdrawal or deposit cap, including receiving and sending payments. The amount placed in a current account does not accrue interest.

Fixed Deposit Account: A fixed deposit account enables people to deposit a one-time quantity of money for a predetermined amount of time, which can be anything from a few months to a few years. Although a fixed deposit's interest rate is typically higher than that of a savings account, the money cannot be accessed until it matures. A penalty could apply if money is withdrawn early from a fixed deposit account.

Recurring Deposit Account: A recurring deposit account is similar to a fixed deposit account; however, the account user makes regular monthly deposits as opposed to making a one-time large deposit. The interest rate on recurring deposits is typically higher than the interest rate on savings accounts.

Managing shares and securities in an electronic format requires the usage of a demat account. For trading on the stock market, it is necessary. Investors can hold shares and securities in a safe and secure manner with a demat account.

NRI Account: An NRI account is made for Indian nationals who aren't citizens but nevertheless desire to keep their savings in India while living abroad. NRE (Non-Resident External) and NRO (Non-Resident Ordinary) are the two different categories of NRI accounts. While NRO accounts are utilised for transactions in Indian currency, NRE accounts are used for foreign currency transactions.

Salary Account: A salary account is how employees are paid on a regular basis. The bank offers services including free ATM withdrawals, internet banking, and mobile banking, yet the account typically has no balance.

In conclusion, numerous sorts of bank accounts are offered in India, each of which is created to satisfy a different set of demands and criteria. It's critical to select the appropriate account type depending on your financial objectives and needs. Individuals and organisations can choose the account that best meets their financial needs by being aware of the features and advantages of each account type. Banks in India give their customers a range of alternatives, from savings accounts for their everyday banking requirements to specialised accounts for stock market trading. To get the most of your money and reach your financial objectives, it's crucial to conduct your homework and analyse different account types before opening an account.



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