What are the types of bank accounts?

Almost 3 years ago, when I went to the bank with my father, I got too confused after hearing about different bank accounts. I had to open my account, so I took my father’s help to understand what are the types of bank accounts. He said there are many accounts like a savings account, current account, FD account, recurring deposit account and so on. Honestly; it was all confusing to me, so I asked him to explain them. I have shared what I learnt from my father.

What are the Different Types of Bank Accounts?

As my father and I sat down, he started informing about the account types in simple terms, and I realised there are quite a lot of options. Now, I know which accounts are suitable for different needs, whether it’s for saving, everyday spending, or investing for the future.

Here’s what I learned on what are the type of account in bank:

• Savings Account: My father said this is the most common account people have. It’s designed for regular saving and earns a bit of interest over a year. He also mentioned that it’s great for people like me who want to put money aside but still have easy access when needed.

• Joint Account: According to him, this is an account shared by two or more people and used for family or business reasons.

• Current Account: This one’s more for businesses or people who make a lot of transactions. I realised I didn’t need it myself, but he explained it’s perfect for those who manage frequent payments and deposits, like small business owners.

• Demat Account: If you’re into investing in stocks, this is the one you’ll need. He explained how it helps manage shares and other securities electronically.

• Fixed Deposit Account: This is for people looking to save money over a fixed period. I found this interesting because you get a higher interest rate if you can lock your money away for a while.

• Recurring Deposit Account: He explained that this is for people who want to save regularly, but in smaller amounts each month. It felt like a good option for long-term planning.

• NRI Account: He also explained about the NRI Account, which is for people living outside of India but still wanting to manage their finances here. It’s a special type of account that lets non-residents deposit money in Indian currency.

I finally understood, and I opened a savings account. 

As I know what are different types of accounts in bank, I feel more confident about where to keep my money depending on what I need.

I hope this helps you understand better what are the types of bank accounts.

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Whether you’re a college student, a housewife, or a retired professional, not having a bank account is unimaginable. Based on the location of the account holder, frequency of transaction, and purpose, banks offer a wide range of bank accounts to choose from. Let me tell you what are the types of bank accounts.

It is a regular deposit account, where one earns a minimum rate of interest. Here, the no. of transactions one can make each month is capped. Banks offer a wide range of Savings Accounts based on the purpose of holding the account, features of the product, type of depositor, etc.

When you have a savings account with a bank, you get to avail special offers on opening a 2nd account like a DEMAT account.

It is a deposit account for entrepreneurs, business owners, and traders, who receive and make payments more frequently than others. These accounts hold more liquid deposits without any limit on the no. of transactions per day. A current account also allows an overdraft facility.

A salary account is the one you’ve opened as per the tie-up between your company and the bank. Your salary gets credited to this account. The bank, in which you have a salary account, also maintains the reimbursement account (where your reimbursements and allowances are credited to)

To keep your funds and earn a good rate of interest on it, there are different types of accounts like recurring deposits (RD) and fixed deposits (FD).

An FD account lets you earn a fixed rate of interest for keeping a certain sum of money locked in for a specific period of time that is until the FD matures. The maturity period of an FD ranges from 7 days to 10 years. The FD’s rate of interest depends on the FD’s tenure and generally, you can’t withdraw money from an FD before it matures.

An RD has a fixed tenure. You have to deposit a fixed sum of money regularly in this account –once a quarter or every month – to earn interest. In RD,  you are required to deposit a smaller amount more frequently unlike FDs where you have to make a lump sum deposit. Its maturity period can range from 6 months to 10 years and you can’t change the RD’s tenure and the amount to be invested each quarter or month.

There are different types of bank accounts for Indians or Indian-origin individuals staying overseas. These accounts are known as overseas accounts. They include 2 types of fixed deposits or savings accounts – Non-resident ordinary (NRO) and Non-resident external (NRE) accounts. Several types of bank accounts for NRIs include -

1. A) Non-resident external (NRE) fixed deposit accounts or savings accounts

2. B) Non-resident ordinary (NRO) fixed deposit accounts or savings accounts

3. C) Foreign currency non-resident (FCNR) account

Now you know what are the types of accounts in a bank.

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I hope I cleared all your doubts regarding what are the types of bank accounts.