Types of Bank Accounts- Features & Benefits Bank Accounts! (2024)

Types of Bank Accounts List

Previously, there were only four types of bank accounts that were operating in India. These bank accounts included Current, Savings, Fixed Deposit, and Recurring Deposit Accounts. However, with the banking sector advancements, there are other forms of bank accounts that were introduced. These new bank accounts are DEMAT and NRI Account. Hence, the bank accounts that are currently operating across the public and private sector banks in the country are:

Savings Account
Recurring Deposit Account
Current Account
Fixed Deposit Account
NRI Account
DEMAT Account
Senior Citizens’ Account
Salary Account

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1. Savings Account

As we see, the savings account can be opened either by an individual or jointly by two individuals with a prime objective of saving money.

The main advantage of opening a savings bank account is that it pays the customer a sum of amount in the form of interest against opening this type of savings account.

Features of Savings Bank Account:

No limit of the number of times the account holder can deposit money in the account. However, there is a restriction on the number of times money can be withdrawn by the account holder.
The rate of interest varies from 4% to 6% per annum
No minimum balance required to be maintained.
Internet bank service is provided
Account holders are provided with an ATM/ Debit/ Rupay Card
Savings bank account is further categorized as Basic Savings Bank Deposit (BSBDA) and Basic Savings Bank Deposit Accounts Small (BSBDS)
Such a type of account is suitable for students, working professionals, housewives, pensioners, etc.

2. Current Account

Current Account is the second type of bank account. Such an account is not used for the purpose of savings. It is only opened by businessmen who have a larger number of general transactions with the banking organization.

Features of Current Account:

Apart from businessmen, current bank accounts are opened by associations, companies, institutions, religious institutions, etc.
There is no fixed number of times that the current bank account holders can deposit or withdraw money from it.
Internet banking feature is available.
It does not have any fixed maturity
Overdraft facility is provided
There is no rate of interest paid on current bank accounts.

Check the Difference Between Current Account and Saving Account now!

3. Fixed Deposit Account

Fixed Deposit or an FD account is the third type of bank account customers can open in any public or private sector bank. It provides investors a higher rate of interest than the regular savings account on the given maturity date. It may require the creation of a separate account altogether.

Features of Fixed Deposit Account

It is a one-time deposit and take away account.
The account holder needs to deposit a fixed amount of funds for a fixed period of time.
The amount deposited in a fixed deposit account is withdrawable just once and not anytime as per the account holders’ requirements.
A certain amount of interest is paid on the fixed deposit account
The rate of interest of a fixed deposit account depends on the amount deposited and the time duration for which the amount is deposited.
The bank is liable to repay the full amount deposited in the FD before the maturity date.

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4. Recurring Deposit Account

Recurring Deposit or RD account is a type of account in which the account holder is required to deposit a fixed amount of money every month till the time it reaches the fixed maturity date. The account is an investment tool that encourages people to make regular deposits and receive decent returns on their investment.

Features of Recurring Deposit Account

It is the regular deposit factor and the interest aspect that the account provides flexibility and ease of investment to the account holders.
The RD account can be opened by any individual or an institution either jointly or separately
Regular monthly instalments to be added can range from as low as INR 50 to any amount from one bank to another
The account can be opened ranging from 6 to 120 months.
Its rate of interest varies from bank to bank
The Recurring Deposit Account provides the nomination facility as well
Account holders are issued passbooks to know their account summary on a regular basis
The bank can deduct a sum of the amount as a penalty if premature withdrawal of the amount is made.

4. DEMAT Account

The DEMAT Account constitutes the shares and securities held in electronic form. The DEMAT account stands for Dematerialization Account. Such accounts are maintained by two depository institutions, the National Securities Depository Limited and the Central Depository Services Limited.

Features of DEMAT Account

Such accounts help easy trade of share and securities
They facilitate conducting stress-free transaction of share
Opening of the DEMAT Account requires the KYC procedure
The transaction cost is reduced
Traders can work from any location
The transfer of securities can be done with less paperwork

Check the Difference Between Demat and Trading Account now!

5. NRI Account

The option of the NRI Account is provided by both public and private sector banks to fulfil the banking requirements of a non-residential Indian or a person of the Indian origin. An NRI account allows overseas transfer of funds to India and holds the funds in Indian rupees.

Features of NRI Account:

NRI account enables free repatriate of funds without any restrictions
It also allows easy investment in the Indian investment instruments like FDI, FPI, FII, etc.

Types of NRI Accounts

Non Resident Ordinary Rupees (NRO) Account: It allows transfer of foreign earnings easily to India. This account can be opened in the form of Savings/ Current/ FD/ RD account. NRO accounts can be opened by an individual or a a group of persons
Non Resident External Rupees (NRE) Account: This account comes into existence when an Indian citizen moves abroad for employment. Their existing bank accounts are then converted into NREs. It can be jointly opened with an Indian resident as well.
Foreign Currency Non Resident (FCNR) Account: This account can be opened to manage an international currency. FCNR can only be in the form of Term deposit and can be withdrawn after its maturity.

6. Senior Citizens’ Account

People above 60 years of age are considered as senior citizens as per the government’s directives. Senior Citizens’ accounts are normal savings accounts with the difference that an interest benefit ranging from 0.25% to 0.50% p.a. Is decided by the respective banks from time to time for the beneficiary account holder.

The Senior Citizens’ accounts are opened as joint accounts, the first name in the account should be that of a senior citizen only then the benefit of the same goes to the senior citizen. The accounts under the senior citizen scheme are applicable to only those senior citizens who are residents of India.

7. Salary Account

A salary account is a type of bank account designed to facilitate the smooth transfer of monthly salaries from employers to employees. Salary accounts offer a financially convenient environment for both employers and employees.

Features of Salary Account:

Primary features of a salary account is the direct credit of monthly salaries by employers.
Salary accounts generally have low or no minimum balance requirements

Benefits of Salary Account:

Salary accounts usually come with minimal or no fees for account maintenance, transactions, and ATM withdrawals. This helps employees save on banking costs and ensures that the bulk of their salary remains accessible for personal use.
A salary account offers opportunities to access financial products and services offered by the bank like personal loans, credit cards, or investment options.

Know the Difference Between Salary Account and Savings Account now!