Different types of bank accounts in India and rates of interest offered

When it comes to the question of your hard earned money, you would never ever, like to take any chance to lose it like that. Moreover the Indian bank interest rates are also very alluring to make one fall for it. Opening an account with a bank is the easiest way to keep your money in safe reserves. But do you know that there are quite different types of Bank Accounts available in India to serve customers with varied needs?

Today this article is aimed to provide special insight into the different types of bank accounts along with their interest rates for your quick help.

Current Account

Current accounts are basically meant for businessmen since this account never used for the purpose or savings and holds no minimum transaction limits on a particular day. This type of account is mostly opened in the name of a firm or a company. No interest is offered.

Key features:

• The main objective behind this account opening is conducting of smooth business transactions.

• No restrictions on a number of transactions through cash or cheque.

• No interest is levied on such accounts.

• No fixed maturity since these is current running accounts.

Savings Account

The most popular deposit account for most individual customers is this Savings Bank Account. This account abreast of providing cheque and ATM facility to its customer also provides several other facilities to them in terms of monetary transactions. The bank interest rates in India for these accounts are 4.00% for all.

Key Features:

• There are no limits on the number and amount of deposits to be made in this account though furnishing of PAN details is required for the amount more than 50,000 INR.

• Withdrawals up to a limit are allowed through both ATM and Cheque.

• For the functioning of the account, a minimum balance is required to maintain in the savings account.

Recurring deposits/ Accounts

Popularly known as RD, the recurring deposit is a very special kind of term deposit with a bank which allows individuals with regular income to deposit a fixed amount on a regular basis for savings purpose. Through this account, the money deposited brings in interest as well. The rate of interest is 7% to 8% per annum.

Key features:

• The deposited money is subject to a maturity period of 6 months to 120 months.

• These accounts are mainly single or joint operational accounts along with nomination facility.

• The rate of interest is similar to that of fixed deposits.

• Interest is obtained on a quarterly basis.

Fixed/ Term Deposit accounts

Most of the banks in India may it be nationalized or private, extend fixed deposit facility to their customers and the account is known as Fixed or Term Deposit accounts. The tenure of such accounts ranges from 7 days to 10 years with a minimum rate of interest 6.75% for general and 7.25% for Senior citizens.

Key features:

• The closing of the account on the will of the account holder is available.

• The rate of interest keeps on varying as per the market rates.

The above article is sure to prove handy in your first step towards saving for your life. Still reading of all the related documents before opening an account is advisable to avoid any difficulty in future.