Bank accounts are a systematic way to keep your money in safe hands and also keep track of it. There are various types of bank accounts and you can open any one depending on your specific requirements.
Read ahead to know what are the types of bank accounts and what are they best suited for.
Given the diverse needs of the customer base, banks have rolled out various types and subtypes of accounts. Seven of the most common types of bank accounts are mentioned below -
list of bank accounts that we shall be discussing in this:
When you search how many types of bank accounts are there, the most common type is the Savings Account. As the name suggests, this account is used for depositing funds and you also earn some interest depending on the time you leave the funds in your account.
These bank accounts are used to manage daily finances by salaried and self-employed. The eligibility criteria for opening and the interest rates may vary on the type of savings bank account you have.
Depending on your needs and the types of bank accounts available, you may choose to open any kind of savings bank account. The following are the different types of savings accounts that you can open in most major banks -
Regular Savings Bank Account
Zero Balance or Basic Savings Bank Account
Women’s Savings Bank Account
Senior Citizen’s Savings Bank Account
Kids’ Savings Bank Account
Family Savings Bank Account
Privilege Savings Bank Account
Out of the top 5 different types of bank accounts, the current account is also a major one. These accounts are opened by traders, businessmen, entrepreneurs, or self-employed individuals.
The bank does not give any interest on the money parked in current bank accounts.
They allow certain kinds of facilities like overdraft facilities, which means account holders can withdraw more than what is present in their account.
This helps entrepreneurs to run their businesses with ease. A minimum balance is also required to be maintained in such accounts.
When you search for what are the types of bank accounts, you will also come across a salary account. It is a type of account where you receive your salary. It is usually opened at the request of major organizations which individuals can operate on their own.
The organization also has an account in the same bank which makes the monthly salary crediting process easier.
There is no minimum balance requirement in such bank accounts, but only salaried persons can open such accounts.
In most cases, if you don’t receive your salary for three consecutive months in a salary account, the bank automatically converts it into a savings account.
Also Read: Government Banks in IndiaYou need a savings account in a certain bank to be able to open a Recurring Deposit Account. Such accounts have a fixed tenure, decided by the account holder, and you are supposed to make recurring or frequent deposits.
You can choose if you want to invest every month or quarter, and the amount also varies depending on your needs.
It is an extremely liquid kind of investment as it allows you to withdraw the money anytime, even before the end of the decided tenure.
But you will not make any gains if you withdraw the money before the Recurring Deposit matures.
Another one out of the different types of bank accounts is a Fixed Deposit Account. This account has a fixed tenure, but you need to make a lump sum contribution to open this account.
You can make a Fixed Deposit for any time period or of any amount that you want.
The interest earned will be higher if the tenure is longer. These investments also allow you high liquidity, i.e. you can withdraw the money before the FD matures.
But in that case, the interest earned will be significantly lower.
When you search for different types of bank accounts in India, you might also come across a DEMAT account which is short for Dematerialization account.
If you want to trade and invest in the stock market or other securities, having a DEMAT account is crucial.
It is a type of bank account that holds your share certificates and other securities in an electronic format.
These accounts make the task of holding shares, bonds, government securities, Mutual Funds, and insurance easier and hassle-free. They do away with the physical handling and maintenance of paper shares and related documents.
If you are a non-resident Indian or are planning to shift outside the country soon, you will need to open an NRI account. They are of three types NRE, BRO, and FCNR accounts.
NRE Account stands for Non-resident External Account and it allows complete security to the account holder’s funds. It is exempt from taxes and is mostly used for personal and business banking, and making investments in India.
All money deposited in this account gets converted to INR or Indian Rupees. This means that you can deposit funds in any currency, but only withdraw INR.
The money that you deposit in this account must have been earned outside of India. An NRE Account can be used to transfer money to both NRE and NRO accounts.
NRO Account is short for Non-resident Ordinary Account and its main purpose is to manage funds that are earned in India by an NRI, for example, pension, rent, etc. The funds in this account are subject to TDS deductions.
These accounts allow both foreign and INR to be deposited, unlike NRE accounts. But, withdrawals can be made in INR only. This account can be jointly held by an NRI and a resident Indian, which makes it a great choice for families where only one or two members are NRIs.
FCNR is a Foreign-Currency Non-resident Account and it is unlike the other two NRO accounts. This account is maintained in foreign currency approved by the Reserve Bank of India.
The principal and interest from these accounts are transferable, while the interest earned is not taxed in India. If the income is earned in a currency other than the approved list of currencies, then an approved currency is chosen for the conversion of the earnings or the proceeds to be deposited.
Irrespective of your profession or age, you need to have a bank account. Bank accounts help you keep track of your finances and manage it better. You can also earn interest on money parked in the accounts.
Most government and public sector banks offer all of these kinds of bank accounts and you can choose the one that suits your needs. You can also apply for loans through your bank account.
In case you need urgent funds, you can even opt for instant personal loans from moneyview. You can get loans from Rs.5,000 to Rs.10 Lakh with minimal documentation. To know more, please visit our website or download the moneyview app.
The 5 main types of bank accounts are Savings Accounts, Current Accounts, Salary Accounts, NRI Accounts, and DEMAT Accounts.
KYC stands for Know Your Customer, and it is a procedure through which banks obtain the identity and address information of a customer. It is mandatory to complete the KYC process while opening an account and also update it from time to time.
The main types of bank transactions are deposits, withdrawals, and transfers. The first means putting money into a bank account, the second means taking money out, and the last means moving money between two bank accounts.
You can know your bank account type by reading the details on your passbook, or by looking at your account number.
You can open as many bank accounts as you want, but you should not have more accounts than you can manage.
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