Types of Bank Accounts

                                                             BANK ACCOUNTS
we can divide the bank accounts in major two categories and these two are:-

• Demand Deposit

• Term Deposit

Demand Deposit   In Demand deposit account, a party can demand its deposits at any time.  They are further classified in two accounts:-

• Saving Deposit Account:- 

1. it is suited for person having limited income and wants to save his/her money for future needs.
2. It is opened with a minimal initial deposit and also a minimum balance is to be maintained as prescribed by bank.
3. Any time u can deposit or withdrawn money from this account.
4. Normally there is a restriction on the number of withdraws.
5. Interest is given on the balance in account.

• Current Deposit Account  :- 

1. This account is suited for big business man, schools, offices and corporates. since they have to make their payments through bank accounts, they needs withdraws of  money many times. That,s why they use current deposit account because, there is no restriction on number of withdraws.  
2. There is no interest is allowed on deposits, rather than account holder have to give operational charge each year. 
3. Account holder can withdrawn money more then in his credit by overdraft facility. 

Term Deposits :- In this deposit, party gets their funds after the period of maturity of account. it is also divided in two types:

• Fixed Deposit Account :- 

1. It is used to save money for a long period of time. it is fixed for a given time.
2. Banks allow higher interest rate then of saving bank account.
3. The period of deposit may vary from 7 days to 10 years or more during which no withdraw is allowed.
4. If accont holder encash theri FD before maturity, then it gets lower interest rate.
5. It can be renewed for more years after period of maturity.
6. Banks also provide loans on the security of FD receipt.

• Recurring Deposit Account :-

1. This bank account is suitable for person who wants tosave regularly over a period of time.
2. Person has to agree to deposit a fixed aount once in a month for a certain period.
3. Rate of interest is higher then saving bank but less then FD accout.
4. The depositer is allowed to break RD before maturity and get back the money with the interest till that period.
5. It can be opened individually or jointly.