Types of Bank Accounts, Opening a Bank Account

Types of Bank Accounts

In India, bank offer four main types of Bank accounts. These are:

• Current Accounts 
• Saving Accounts 
• Recurring Deposit Accounts 
• Fixed Deposit Accounts 

Current Accounts 

Current accounts offer the most liquid deposits and thus, we best suited for businessmen and companies. As these accounts are not meant for investments and savings, there is no imposed limit on the number or amount of transactions that can be made on any given day. Current account holders are not paid any interest on the amounts held in their accounts. They are charged for certain services offered on such accounts. 

Saving Accounts 

Savings accounts are meant to promote savings, and are therefore the number one choice for salaried individuals, pensioners and students. While there is no restriction on the number and amount of deposits made, there are usually restrictions on the number and amount of withdrawals. Savings account holders are paid interest on their savings. 

Recurring Deposit Accounts 

Recurring Deposit accounts, also called RD accounts, are the accounts of choice for those who want to save an amount every month, but are unable to invest a large sum at one time. Such account holders deposit a small, fixed amount every month for a pre-determined period (minimum 6 months). Defaulting on a monthly payment results in the account holder being charged a penalty amount. The total amount is repaid with interest at the end of the specified period. 

Fixed Deposit Accounts 

Fixed Deposit accounts, also called FD accounts, are ideal for those who wish to deposit their savings for a long term in return for a high rate of interest. The rate of interest offered depends on the amount deposited and the time period, and also differs from bank to bank.  In the case of an FD, a certain amount of money is deposited by the account holder for a fixed period of time. The money can be withdrawn when the period expires.  If necessary, the depositor can break the fixed deposit prematurely. However, this usually attracts a penalty amount which also differs from bank to bank. 

Opening a Bank Account 

Opening a Bank account is quite a simple process. Take a look at the steps to open an account of your own:

Step 1: Fill in the Account Opening From 

This from requires you to provide the following information:

• Personal details (name, address, phone number, data of birth, gender, occupation, address) 
• Method of receiving your account statement (hard copy/email)
• Details of your initial deposit (cash/cheque) 
• Manner of operation your account (online/mobile banking /traditional via cheque, ship books) 

Ensure that you sign wherever required on the from. 

Step 2: Affix your Photograph 

Stick a recent photograph of yourself in the allotted space on the from. 

Step 3: Provide your Know Your Customer (KYC)  Details 

KYC is process that helps banks verify the identity and address of their customers. To open an account, every individual need to submit certain approved documents with respect to photo identity (ID)  and address proof.  Some Officially Valid Documents (OVDs)  are:

• Passport
• Driving License
• Voters'Identity Card 
• PAN Card 
• UIDAI (Aadhar)  Card 

Step 4: Submit All your Documents 

Submit the completed Account Opening From and KYC documents. Then wait until the forms are processed and your accountvjas been opened!