Types of Bank Accounts in India

Different types of bank accounts in India are as follows:

Saving account: Saving account is used by general public ; there are restrictions  imposed by the bank on the amount to be withdrawn by the depositor. To withdraw more money he should have to give prior notice to the bank. Banks also pays interest on this account but the rate of interest is lower than the interest payment on the fixed deposits

Current account: This account is generally owned by businessmen. The person who has this account can withdraw money any times from the bank. Generally no interest is paid by the bank on this account and bank could impose charges from the customer if the amount in the account is below a certain specified level.

Fixed Deposit or time deposit account: Cash is deposited in this account for a fixed period of time and customer can also withdraw the amount before the time in the case of any emergency, but they will receive lesser interest. Longer the period of deposit higher is the rate of interest.

Recurring Deposit Account: Under this account, a specified amount is deposited every month for a specified period, such as 12, 24 ,36 or 60 months. This amount can not be withdrawn before the expiry of the given period except under exceptional circumstances.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. Interest given on this account is higher than other accounts.

Demat Account:Demat account refers to the dematerialized account for individual Indian citizens to trade in listed stocks or debentures in electronic form rather than paper, as required for investors by the Securities and Exchange Board of India (SEBI). In a demat account, shares and securities are held electronically instead of the investor taking physical possession of certificates. A demat account is opened by the investor while registering with an investment broker (or sub-broker). The demat account number is quoted for all transactions to enable electronic settlements of trades to take place.

 NRE account: A Non-Resident External (NRE) account is a bank account that’s opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of traveler’s checks or notes.

 NRO account: A Non-Resident Ordinary (NRO) account is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. An NRI can also open this account by sending remittances from his home country or by transferring funds from his other NRO account. It offers the same facilities as an NRE account, except that any repatriation done through this account should be reported to RBI by filling up prescribed forms.