#currentaccounts

There are basically four different types of bank accounts.

They are as follows-

1. Current Account - This account is generally meant for businessmen. This is because they have a high frequency of bank transactions. Under this account, there is no restriction on the number of withdrawals and hence is most suitable for businessmen. Some current account holders are also given overdraft facility. The customer gets cheque book facility for current account

2. Savings Account - This account is made for the general public especially salaried people. The main objective of having the savings account is to cultivate the habit of saving among people. Interest is also paid by the banks on the savings account. However, there are restrictions on the number of withdrawals that can be made through savings account and hence this type of account is not suitable for businessmen. Customers are generally required to maintain a certain minimum balance in the account.

3. Recurring Deposit Account - This type of an account is also called as the cumulative time deposit account. It is meant to cultivate the habit of savings among economically weaker section of the society. Under this type of an account, the customer is allowed to deposit a certain small but fixed amount (Rs.50, Rs.100, Rs.500 etc.) every month for a fixed period of time. The customer gets back the total amount deposited along with interest at the end of the specified period.

4. Fixed Deposit Account - Under this type of account, a one-time lump-sum deposit is made by the customer for a fixed period of time (generally 3 months to 10 years). The customer cannot withdraw the amount during this period (These days most banks allow pre-mature withdrawal with a minor penalty). However, he can take a temporary loan against the fixed deposit receipt (FDR). At the end of the fixed period, the customer can either withdraw the amount or renew the fixed deposit.

Following hybrid account is also offered by a lot of banks now-

Multiple Option Deposit Account : It is a type of Saving Bank Account in which deposit in excess of a particular limit gets automatically transferred into Fixed Deposit. On the other hand, in case adequate fund is not available in our Saving Bank Account so as to honour a cheque that we have issued, the required amount gets automatically transferred from Fixed Deposit to the Saving Bank Account. The balance amount continues as Fixed Deposit and earns interest as per existing rate of interest. One can earn higher rate of interest from a Fixed Deposit Account than from a Saving Bank Account.