Friends, you all must know about Bank Account. You too must have a bank account in some bank or the other. You must have opened your account. But do you have all the information about the bank account? What is a bank account, how many types are there etc. If not then we will provide you all the information in this article. That is why read this article till the end.
What is Bank Account: What is Bank Account
- Bank account is the medium through which the bank works to connect people with itself.
- Bank account is a financial account provided by banks in which all the transactions between customers and the bank are recorded.
- To avail all the facilities provided by a bank, customers are required to have a bank account.
- Bank Account is also called bank account.
Types of Bank Account: Types of Bank Account
Every bank sets some terms and conditions for the bank account provided by itself. On the basis of these Terms & Conditions, the bank account is divided into four parts.
These bank accounts are explained in detail below:-
1) Current Account :–
- It is also called current account.
- In Current Account, the account holder has to keep a certain amount in his account. This is so that the minimum balance charge is not deducted. Also the account should not be closed.
- There is no limit for withdrawing and depositing money in Current Account.
- In this, cash flow happens faster. Amount Withdrawal and Deposit rate are almost equal.
- In this, the bank does not give any kind of interest to the customers on depositing money. Rather it charges you for providing facilities.
- Most of the banks provide facilities like Transfer, Overdraft, Direct Debit, Mobile Banking, Internet Banking etc. in Current Account.
- This type of account is useful for companies, firms and industries.
2) Saving Account :-
- It is also called savings account.
- To keep your saved money safely, you open a savings account. These are opened to save money.
- To open a savings account, a certain amount prescribed by the bank has to be deposited so that your account can be opened. This amount can range from Rs 100 to Rs 1000.
- Its biggest advantage is that you get interest on depositing money in it.
- In Saving Account you are given the facilities of Passbook, Check Book, Debit Card, Credit Card, Mobile Banking, Net Banking etc.
- Cash flow in savings account is less. This means that the rate of depositing money is higher than the rate of withdrawal of money.
- You can deposit or withdraw money in Saving Account anytime. There is no limit for depositing money. But the limit for withdrawing money remains fixed. For example, you can withdraw money from ATM only 30 times in 6 months.
- There is a limit for transactions in a savings account in a day. In most of the banks the transaction limit is fixed at 5 times in a day.
- *A fee is charged for transacting more than 5 times.
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3) Fixed Deposit Account :-
- It is also called fixed deposit account or FD.
- It is also called term account or term deposit.
- In FD you deposit a specific amount for a fixed time period. And when this time period is completed, you can withdraw money from FD with interest.
- You get more interest on FD. If you have good savings then you can open FD.
- However, if you withdraw money from FD before the Fixed Time Period, the bank charges you as a penalty.
- The penalty amount is different for all banks.
- Almost all banks provide FD facility.
4) Recurring Deposit account :-
- It is also called Recurring Deposit Account or RD.
- In this, you deposit a fixed amount every month for a fixed time. When the time is over, you can withdraw the deposited amount with interest.
- If you withdraw money from RD before the fixed time, the interest rate may be reduced or the bank may also impose some fine on you. The amount of penalty may be different for different banks.
- Almost all banks provide RD facility.
- Like FD, in RD also you can withdraw money only once.
- This is suitable for those people who get salary every month. With this they can save money for the future.
- Time period for RD ranges from 6 months to 10 years.
- In some banks the amount to be deposited in RD is also Rs 100/-. You can decide the amount to be deposited in RD as per your choice.
Above we have explained in detail about accounts and their types. Hope you have got all the information about bank account.
Some common questions related to Bank Account which are usually asked: –
Q. How many accounts can a person open in the bank?
A. A person can open any number of accounts in the bank. There is no fixed number regarding bank account in Income Tax.
Q. What is FD?
A. FD means Fixed Deposit. This is an account in which a fixed amount is deposited for a fixed time period. When the time is over, they can withdraw the fixed amount with interest. You can withdraw money only once.
