Articles

What Are The Two Types Of Bank Accounts People Can Open?

by Arjit Chalmela Finance Student

Personal banking is a growing consumer segment for banks. To put it simply, personal banking is the service that a bank extends to individuals or to retail customers. This service is highly personal with a lot of interaction between the bank personnel and the customers.

There are different accounts that a bank offers to its retail customers as a part of personal banking. Depending on the needs and requirements of the account holder, the type of bank account can be decided.

Here are the different accounts opened in personal banking:

  1. Savings account:

This is one of the most popular accounts among individual account holders. A savings account is a basic account where people can park their funds and withdraw it when they need. However, the RBI has restricted withdrawals from a savings account to maximum 4 times a month. The funds from this account earn a nominal rate of interest. Banks offer facilities like net banking, mobile banking, debit cum ATM card etc. Generally banks give one free cheque book to a savings account holder in a year. The balance in the savings account earns interest at 4% per annum based on average balance maintained. Most banks have some form of minimum balance requirements. If these requirements are not met then banks charge a penalty. A savings account can be used for making payments to parties, used in online transactions. It is also possible to use the savings account in financial transactions like making investments. Consequently, incomes from investments will also get credited to the savings account. Banks are coming up with savings accounts that have newer features to adapt to the changing customer requirements.

  1. Current account:

This account provides unrestricted access to the liquidity in the account. This type of personal banking is best suited to businesses and small companies that need extra liquidity. Banks customize services for these accounts and provide cash management services, batch payment etc. Apart from this, current account holders also get other services like net banking, mobile banking etc. The account holders get a lot of services that can help their business-like cash management.

It is possible for a business to get cheques and cash collected all over the country deposited into outstation branches without any extra cost. Depending on the type of current account, the account holder gets free cheque books, free demand drafts, special payment gateways, discounted banking services etc. However, there is no interest paid on the balance in the current account.

  1. Rural accounts:

These include zero balance Jan Dhan accounts and other accounts to suit the needs of rural people. These accounts have low compliance requirements and no minimum balance. These are generally linked to Aadhar card of the person to make them eligible for Government schemes.

  1. Zero balance savings account:

This account is a savings account that has no minimum balance requirements. This means that the account holder can maintain any balance without any penalty. There are different types of zero balance accounts like salary account, pension account, kids saving account. Each account has its own features and benefits.

Current account and saving account are the basic two accounts that people can open in banks. Depending on your needs, banks can customize the features and benefits of your account. Opening current account and saving account can be done both online and offline.


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About Arjit Chalmela Innovator   Finance Student

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Joined APSense since, June 28th, 2019, From Mumbai, India.

Created on Mar 13th 2020 09:52. Viewed 393 times.

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