Bank Account

Types & Classification of Bank account 

Traditionally banks  have five categories of deposit accounts, namely Current Accounts, Saving Banking Accounts, Recurring Deposits, money market account and Fixed Deposits. However, in current years, due to ever raising competition, a few banks have introduced new products & services, which combine the features of above two or more types of deposit accounts. These are known by different names in different banks, e.g 2-in-1 deposits, Smart Deposits, Power Saving Deposits, Automatic Sweep Deposits etc. However, these have not been very popular among the public.

1. Checking /Current account : 

A checking or current account offers simple access to your cash for your every day value-based needs and helps keep your money secure. Clients can utilize a debit card or checks to make buys or pay bills. Account may have distinctive alternatives or bundles to help waive certain month to month service fees. To focus the most conservative decision, analyse the profits of diverse checking bundles with the service you really require.

2. Savings account :

A savings account permits you to collect enthusiasm on trusts you've put something aside for future needs. Interest rates can be exacerbated on an every day, week by week, month to month, or yearly premise. Savings accounts change by month to month service fees, interest rates, system used to figure interest, and least opening deposits. Understanding the account's terms and profits will take into consideration a more educated choice on the record ideally equipped for your needs.

There are two types of savings account.

A) General savings account.

B) Special savings account.

A. General savings account :

Generally in which savings account the saved amounts are to be deposited is called General savings account. A specified amount varied from bank to bank and determined by that expected bank is needed to open a General savings account. That amount of money can be withdrawn according to the necessity of client.

B. Special savings account :

The savings account which is opened in/ for a special objective or purpose is called special savings account. The description of a few Special savings accounts are given below with detail :

i) Home shavings account :

Saving money into house, the accumulated deposits are kept through which  special savings accountis called home savings account.

ii) School shavings account :

The students of various schools & colleges get the opportunities of saving a few amount of money is called student shavings account.

iii) Women savings account :

The savings of women are collected through which account is called women savings account.

iv) Labours savings account :

With the help of which savings account the labours can save a few part of their incomes is called labors savings account.

v) Insurance savings account :

Through which savings account the clients get insurance facilities that means financial safety & security in addition to profits is called insurance savings account.

vi) Recurring savings account :

In which savings account, continuously deposits and  withdrawn are performed for satisfying the demand of particular amount of money is called recurring savings account.

3. Certificate of Deposit (CD)/ Fixed Deposit Account (FDR) :

Certificates of deposit is called time liabilities of bank. It is one which is payable after the expiry of predetermined period fixed by the custom himself and allow a set higher interest rates than traditional savings accounts. Because the money you deposit is tied up for the life of the certificate which can range from a few months to several years. Be sure you do not need to draw on those funds before you open a CD, as early withdrawals may have financial penalties.

4. Money market account : 

Money market accounts are same as savings accounts, but they need

you to care taking a higher balance to avoid a monthly service charges. Where savings accounts generally have a fixed interest rate, these accounts have rates that vary regularly based on money markets. Money market accounts can have tiered interest rates, providing more favourable rates based on higher balances. Some money market accounts also allow you to write checks against your funds, but on a more limited basis.

5. Individual Retirement Accounts (IRAs): 

IRAs, or individual retirement accounts, approbate you to save insubordinately for your retirement. These plans are helpful if your employer doesn't offer retirement profits or you want to save more than your employer-sponsored plan allows. These accounts come in two types: the traditional IRA and Roth IRA. The Roth IRA is popular because the funds can be withdrawn tax-free in many situations. Others prefer traditional IRAs. because these contributions are tax-deductible. Both accounts have contribution limits and other requirements you may need to discuss with your tax advisor before choosing your account.

Other Accounts :

★ Loans account :

Loan & advance  are paid through which account is called Loans account.

★ Foreign currency account :

The money is send from foreign with the help of which account is call foreign currency account.

★ Term foreign exchange account :

The money sent from foreign are kept for a fixed duration is called Term foreign exchange account.

★ Non-resident foreign exchange account :

The person living in foreign opens a foreign currencies account and keeps that types of currencies  for fixed time into which account is called non-resident foreign exchange account.