When it comes to banking in India, there are various types of bank accounts available to consumers. Each type has its own set of features, benefits, and limitations. In this article, we’ll explore the different types of bank accounts in India and their uses.
- Savings Account – This is a basic bank account that allows you to deposit and withdraw money. It typically earns interest, although the interest rates can vary. A savings account is great for storing your money while earning a little bit of interest. Most banks in India require a minimum balance to be maintained in savings accounts.
- Current Account – This type of account is used for daily transactions such as paying bills, making purchases, and depositing paychecks. Current accounts usually do not earn interest, but they typically come with a checkbook and online banking facilities. Current accounts are typically used by businesses and individuals who need to make frequent transactions.
- Fixed Deposit Account – A fixed deposit account is a type of time deposit account that requires you to deposit a specific amount of money for a fixed term. In exchange for locking in your money, you’ll typically earn a higher interest rate than a traditional savings account. The interest rates on fixed deposit accounts vary based on the duration of the deposit.
- Recurring Deposit Account – A recurring deposit account is a type of savings account where you can deposit a fixed amount of money every month for a fixed duration. At the end of the term, you’ll receive the principal amount along with interest earned. Recurring deposit accounts are a great way to save money regularly.
- Senior Citizen Saving Scheme (SCSS) – SCSS is a savings scheme available for senior citizens aged 60 years and above. The scheme offers a higher interest rate compared to regular savings accounts and fixed deposits. The maximum investment limit under SCSS is Rs. 15 lakhs.
- NRI Accounts – NRI accounts are for non-resident Indians who want to maintain a bank account in India. These accounts can be in the form of savings accounts, current accounts, or fixed deposit accounts. The interest earned on these accounts is subject to tax regulations.
- Public Provident Fund (PPF) Account – PPF is a long-term savings scheme offered by the government of India. It offers a fixed rate of interest and has a lock-in period of 15 years. The investments made in PPF accounts are eligible for tax deductions.
Understanding the different types of bank accounts can help you choose the right account for your financial needs in India. Whether you’re looking to save money, manage daily transactions, or plan for retirement, there is a type of bank account that can help you achieve your goals.