Some common types of bank accounts

Some common types of bank accounts

A bank is a financial institution that accepts deposits from the public and creates a demand deposits while simultaneously making loans and also offer lending activities which are either directly performed by the bank or indirectly through capital markets. Banks offer various types of accounts to cater to the diverse financial needs of individuals, businesses, and organizations. Here are some common types of bank accounts:

1.    Savings Account:

·       Designed for individuals to encourage saving money.

·       Generally offers interest on the deposited amount.

·       Limited number of withdrawals allowed per month.

2.    Current Account:

·       Primarily for businesses, companies, and entrepreneurs.

·       Suited for frequent transactions and withdrawals.

·       Usually, no or minimal interest is paid on the balance.

3.    Fixed Deposit Account:

·       Involves depositing a lump sum amount for a fixed tenure.

·       Offers a higher interest rate compared to savings accounts.

·       Withdrawal before maturity may attract penalties.

4.    Recurring Deposit Account:

·       Requires regular monthly deposits into the account.

·       Interest is earned on the accumulated amount.

·       Maturity period and interest rates are predetermined.

5.    Joint Account:

·       Opened by two or more individuals who share account ownership.

·       Can be joint savings or joint current accounts.

·       Each account holder has equal access to the funds.

6.    Senior Citizens Account:

·       Specifically designed for senior citizens.

·       May offer higher interest rates and additional benefits.

·       Eligibility criteria often include a minimum age requirement.

7.    Salary Account:

·       Employers use this to credit employees' salaries.

·       May come with benefits such as overdraft facilities or zero balance requirements.

8.    Demat Account:

·       Used to hold and transact in securities in electronic form.

·       Essential for trading in stocks and other financial instruments.

9.    Corporate Account:

·       Designed for businesses and corporations.

·       Offers features like high transaction limits and various banking services.

10. Trust and NGO Accounts:

·       For trusts, non-profit organizations, and NGOs.

·       May have specific features catering to the needs of these entities.