Types of Accounts and its Functions- Banking Awareness:
List of types of accounts and its functions was given here, which was very important Banking Awareness topic for the upcoming Bank Po and Clerk Exams.
Types of Bank Accounts:
· Fixed Deposit Account or Time Deposit Accounts
· Current Account or Demand Deposit Account
· Saving Account
· Recurring Deposit Account
· Demat Account
Fixed Deposit Account or Time Deposit Accounts:
Cash is deposited in this account for a fixed period. This is not transferable. If the depositor stands in need of the amount before the expiry of the fixed period, he can withdraw the same after paying the penalty to the bank. This type of deposit attracts high rate of interest. Longer the period of deposit higher is the rate of interest. It is also called Time Liability of the Bank.
Current Account or Demand Deposit Account:
A depositor can deposit his funds any number of times he likes and can withdraw the same any number of times he wishes. Ordinarily businessmen deposit their funds in this account. No interest is paid by the bank on this account. The bank demands some charges from the depositors if the amount lying in the account falls below the minimum limit.
In this account, interest is given now on per day basis between 10th and 30thof every month.
Recurring Deposit Account:
Under this account, a specified amount is deposited every month for a specific period, such as, 12, 24, 36, or 60 months it can be even for 120 months. This amount cannot be withdrawn before the expiry of the given period except under exceptional circumstances. Interest on the amount deposited is also credited to the account of the depositor. Like time deposit account, interest paid on this account is higher than other accounts.
Demat refers to a dematerialized account. Demat account is just like a bank account where actual money is replaced by shares. Just as a bank account is required if we want to save money or make cheque payments, we need to open a demat account in order to buy or sell shares.
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