TYPES OF DEPOSIT/ACCOUNTS

Savings Account
As the name suggests, the savings accounts can be opened by an individual or jointly by two people with
an aim to save money.

The main benefit of opening a savings bank account is that the bank pays you interest for opening this
type of account with them.

Given below are a few features of the Savings account:

 There is no limit to the number of times the account holder can deposit money in this account but there is a
restriction on the number of times money can be withdrawn from this account.
 The rate of interest that an account holder get varies from 4% to 6% per annum
 There is no minimum balance that needs to be maintained for this type of an account
 The savings account holders can get an ATM/Debit/Rupay Card if they want to
 Savings bank account is further divided into two types: Basic Savings Bank Deposit Account (BSBDA) and
the other one is Basic Saving Bank Deposit Accounts Small Scheme(BSBDS)
 The savings bank account is mostly eligible for students, pensioners and working professionals

Current Account
The second type of bank account is the current bank account. These accounts are not used for the
purpose of savings.

Some important pointers related to the current bank account have been discussed below:

 This type of bank account is mostly opened by businessmen. Associations, Institutions, Companies,
Religious Institutions and other business-related works, the current account can be opened
 There is no fixed number of times that money can either be deposited or withdrawn from such accounts
 Internet banking is available
 This type of bank account does not have any fixed maturity
 Overdraft facility is available for current bank accounts
 There is no interest that is paid on such accounts

Recurring Deposit Account

Recurring Deposit account or RD account is a form of account wherein the account holder needs to
deposit a fixed amount every month until it reaches the fixed maturity date.

The features of the Recurring deposit account have been discussed below:

 Any individual or an Institution can open a recurring deposit account either separately or jointly
 Periodic or monthly instalments that need to be added can be as low as Rs.50/- or may vary from bank to
bank
 The range of months for which an RD account can be opened varies from 6 months to 120 months
  The interest rate varies depending upon the bank you choose to open an account with
 Nomination facility is also available for RC accounts
 Passbook is issued for this type of bank account
 Premature withdrawal of the amount is permitted, provided a sum of amount is deducted as penalty

Fixed Deposit Account

FD or a fixed deposit account is another type of bank account that can be opened in any Public or Private
sector bank.

The list of important things that need to be known with respect to the fixed deposit account has been
mentioned below:

 It is a one time deposit and one time take away account. Under this type of account, the account holder
needs to deposit a fixed amount of sum (as per their wish) for a fixed time period
 The amount deposited in FD account can only be withdrawn all at once and not in instalments
 Banks pay interest on the fixed deposit account
 The rate of interest depends upon the amount you deposit and for the time duration of the FD
 Full repayment of the amount is available before the maturity date of FD

DEMAT Account
Shares and securities which can be held in electronic format constitute the DEMAT account. The DEMAT
account also stands for Dematerialized Account.

Given below the points that need to be known by a candidate regarding the DEMAT Account:

 There are only two depository organisations which manage this type of bank account in India. This includes:
National Securities Depository Limited and Central Depository Services Limited
 This helps facilitate easy trade of bonds and shares
 Helps in conducting stress-free transaction of shares
 KYC is required for opening the DEMAT Account
 Transaction cost is reduced
 Traders can work from anywhere
 The transfer of securities can be done with reduced paperwork

NRI Account
To fulfil the bank requirements of a Non-Residential Indian or a Person of India Origin, the option of NRI
account is available.

The NRI Accounts are further divided into three types:

1. NRO ( Non-Resident Ordinary Rupees) Account – This shall allow you to transfer your foreign earnings
easily to India. It can be opened in the form of an FD/RD/Current/Savings account. These accounts can be
opened by an individual or jointly opened
2. NRE ( Non-Resident External Rupees) Account – When an Indian citizen moves abroad to work there,
his/her account needs to be converted into an NRE account. This account can be jointly opened with an
Indian resident
 3. FCNR ( Foreign Currency Non-Resident ) Account – This type of account can be opened to manage an
international currency. It can only be in the form of Term deposit and can be withdrawn after the maturity
period only.

SUMMARY

1. Savings Deposits:
 Intended for individuals to save their money and earn interest on it.
 Generally offers lower interest rates(3% to 4% compared to other accounts.
 savings accounts are commonly used by individuals from lower and middle-income
households as a safe and accessible way to save money.
 Often come with limitations on the number of withdrawals per month.
2. Current (Checking) Deposits:
 Designed for frequent transactions by individuals and businesses.
 Allows for unlimited withdrawals and deposits.
 No interest.
 Typically come with features like checkbooks, debit cards, and overdraft facilities.
3. Fixed Deposits (Time Deposits):
 Funds are deposited for a fixed term or period, ranging from a few months to several
years.
 Generally offers higher interest rates compared to other accounts.
 The depositor cannot withdraw funds before the maturity date without incurring
penalties.
 Provides a predictable return on investment.
4. Recurring Deposits:
 Designed for individuals who want to save regularly over a specific period.
 Deposits are made at regular intervals (e.g., monthly) for a fixed tenure.
 Interest rates are usually higher than savings accounts but lower than fixed deposits.
 Premature withdrawal may be allowed with reduced interest rates.

STEPS FOR OPENING A SAVING OR CURRENT ACCOUNT

Opening a saving or current account typically involves several steps

to ensure that the process is completed smoothly and securely.
Here are the steps involved:

1. Application on the prescribed form: The first step is to obtain

the account opening form from the bank or financial institution
where you wish to open the account. This form can usually be
obtained in person at a branch or may be available for download on
the bank's website. Fill out the required information in the
application form accurately and completely.
2. Introduction of the applicant: In many cases, especially for new
customers, the bank may require an introduction to open an
 account. This introduction can be done by an existing account
holder of the same bank or a person of good standing in the
community who already has a banking relationship with the bank.
The purpose of this introduction is to provide some level of
verification and reference for the new applicant.
3. Obtaining specimen signature: The bank may ask for a specimen
signature of the account holder. This is a formal signature that will
be used for verification purposes in the future, especially for
transactions like cheque payments or other written instructions.
4. Receiving initial deposit: To open the account, you will need to
deposit an initial amount of money as required by the bank. The
minimum initial deposit amount may vary depending on the type of
account you are opening and the bank's policies. You can deposit
this amount in cash, check, or sometimes through electronic fund
transfers.
5. Opening the account: After completing the necessary paperwork,
providing required documents, and making the initial deposit, the
bank will process your application. If everything is in order and
meets the bank's criteria, they will proceed to open the account for
you. You will be provided with an account number, passbook,
checkbook (if applicable), and any other relevant account
information.

Please note that the specific requirements and procedures might

vary slightly from one bank to another, and they may have
additional documentation or verification processes depending on the
country's regulations and the bank's policies. It's best to check with
the specific bank where you plan to open the account to get the
most accurate and up-to-date information.

Operating the bank account

Passbook: A passbook is a physical record provided by the bank to account holders,

particularly for savings accounts and some other types of accounts. As mentioned earlier,
the passbook serves as a record of all transactions related to the account. Whenever an
account holder performs any transaction, the bank updates the passbook with the details of
the transaction, including the date, description, and resulting account balance.
Pay-in Slip (Deposit Slip): A pay-in slip, also known as a deposit slip, is a small document
provided by the bank to customers to facilitate cash deposits into their bank accounts. When
you want to deposit money into your operating account at a branch, you need to fill out a
pay-in slip with relevant information like your account number, account name, and the
amount you wish to deposit. After completing the slip, you hand it over to the bank teller,
along with the cash you want to deposit. The teller processes the deposit and returns the
pay-in slip to you as a receipt of the transaction.
Checkbook (Chequebook): A checkbook, also known as a chequebook, is a booklet of
personalized checks issued by the bank to account holders. Each check contains the account
holder's name, account number, and the bank's details, along with a unique check number.
When you want to make a payment or transfer funds to someone else, you can write a
check, fill in the recipient's name and the amount to be paid, and sign the check. The
recipient can then deposit the check into their own account or cash it at their bank.

How can you open an account offline?

The steps you need to follow to open a savings account offline at your bank’s nearest branch is given
below:

1. Visit your nearest bank branch 2.

2. Fill up account opening form
3. 3. Submit KYC documents (ID and Address proof)
4. 4. Fix your passport size photos on the form
5. 5. Submit a signed cheque if required
 Submit the signed form to the branch and your bank account will be active within a few days.

What are the documents required to open an Account?

The documents required to open a bank account are very simple and listed below:
 Proof of identity – Passport, Driving license, Voter’s ID card, etc.
 Proof of address – Passport, Driving license, Voter’s ID card, etc.
 PAN card
 Form 16 (only if PAN card is not available)  2 latest passport size photograph