4 Different Types of Bank Accounts

Financial services allow a customer to carry out the various financial transactions everyday like the transfer of funds, payments, depositing savings and other activities. But an individual will need to have a bank account to make use of these services. A financial account which is maintained by a financial institution is called a bank account. A customer can hold their funds in an account and make withdrawals at any time they wish, Within a time period, financial transactions that occur on a bank account is reported to a customer on a bank statement, and the account balance will be the financial position of a customer with the institution at any time.

Different types of bank account provide various needs. Depending on the goals of the customer, it is essential to deposit the money in the account and use the right tools for saving and spending. This will allow a customer to maximise the return from the financial institution, manage the money and minimise fees easily. A lot of banks and financial institutions offer different types of accounts.

The different types of bank accounts are listed below:

Current Account: The current bank account is just for business individuals, companies, public enterprises, firms etc. and they is never used for the purpose of investment or savings. The deposits are one of the most liquid deposits and there are no limits for the number of transactions or the amount of transactions in a day. There will be no interest paid on an amount which is held in the current bank account, but the banks charge a specific service charge on these accounts. The current account does not have any type of fixed maturity since they are on a continuous basis account.

Savings Account: A savings bank account is designed for savings purposes. Any individual either single or jointly, can open a savings bank account. A lot of the salaried persons, pensioners and students use the savings account. The benefit of possessing the savings account is to pay the interest for saving. A saving account holder is allowed to withdraw money from their account when required. The interest rate ranges between 4% to 6%. There is no restriction on the amount and number of deposits. But the withdrawals are subjected to specific limits.

Recurring Deposit Account: A recurring deposit account or a RD bank account is opened by the ones who want to save certain amount of money for a specific period of time and earn a reasonable interest rate. In RD account, a fixed amount will be deposited by the owner and the total amount is repaid with interest at the end of a fixed period.

Fixed Deposit Account: In a fixed deposit account, a particular sum of money is deposited in a bank for specific period of time. It is a one-time deposit and a one time take away account. The funds deposited in the account will not be withdrawn before the expiry period.