Know Top 5 Types of Deposit Accounts

Know Top 5 Types of Deposit Accounts

KW – FD maturity calculator types of deposit

A bank is a financial institution where you can deposit your money and withdraw it whenever you want, as needed. However, it is important to remember that some accounts require you to maintain specific balances, while others do not require you to maintain any balance. Similarly, you can withdraw money from some accounts easily, but you may have to pay a penalty if you intend to withdraw money from other accounts. Furthermore, some accounts do not restrict how many transactions can be made, whereas others do have restrictions on how many transactions can be made each day or month. Therefore, you must understand the different types of deposit  banks offer. 

Listed below are different types of deposit accounts in India

Savings Accounts

Savings Accounts are a basic type of bank account that most of us have in our bank. The purpose of this account is for you to deposit your money and earn interest on your deposits. A minimum balance must always be maintained in this account as specified by your bank. Depending on the bank and the account type, the minimum balance requirement can range from as little as INR 500 to as much as INR 10,000 to as much as INR 100,000. Even though you can deposit and withdraw funds from a Savings Account through ATMs, there are limitations on both in-bank and ATM withdrawals on Savings Accounts. 

Current Accounts 

In contrast to the Savings Account, which is designed to assist you in putting money into savings, a Current Account is designed to assist you in making deposits for your business transactions. A business account will allow you to deposit and withdraw cash to run a business. Generally, banks offer unlimited daily transactions, and there are no limits on the amount that can be withdrawn or deposited in a bank’s Current Account. It should be noted, however, that current account minimum balance requirements tend to be higher than those for savings account deposits when compared to those for current accounts.

Salary Accounts

Despite being a type of Savings Account, a Salary Account is unique because your employer opens it specifically to deposit your compensation. Unlike most accounts, where you can choose your preferred bank, with your Salary Account, you do not have the option to choose your preferred bank. There is usually a tie-up between the employer and one specific bank for the employer to open a Salary Account for their employees. There is no limit to the amount of money you can withdraw from this account, which is why it is sometimes called a zero-balance account, as you can withdraw every single cent your employer has deposited.

Fixed Deposit Accounts

The Fixed Deposit is a kind of deposit ideally suited for investors who prefer a conservative investment strategy. A Fixed Deposit account is an account with the bank in which you deposit or put away a specific amount of money for a certain period. A fixed amount of money is deposited with a bank, and you earn interest on it for the duration of the deposit. You can also calculate your maturity amount using the FD maturity calculator. With the help of the FD maturity calculator, you can also compare FD accounts offered by several banks at various interest rates before investment. Whenever you reach the maturity of your fixed deposit, you will be able to withdraw both the principal amount and the interest payment you have accrued. 

Recurring Deposit Accounts 

In Recurring Deposit Account, you make recurring deposits, usually monthly or quarterly, of a fixed sum of money. Recurring deposits allow you to set aside a small amount each month towards creating a lump sum. Your investment tenure typically requires depositing the same fixed amount on the selected date. The maturity tenure of RDs naturally varies from 6 months to 10 years. As similar to FD maturity calculator, you can also calculate RD maturity amount using RD maturity calculator tool. Recurring Deposit Accounts, like Fixed Deposit Accounts, are penalized if you withdraw them prematurely.

Final Thoughts

In India, deposit accounts are an important part of the financial system. They provide a safe and convenient way for people to save and invest their money. There are many different types of deposit accounts available, and each has its benefits and drawbacks. The most important thing to remember when choosing a deposit account is to find one that best suits your individual needs and financial goals. There is no one-size-fits-all solution, so it is important to compare different accounts and choose the one that offers the most advantages for you.

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About the Author: Vincent Kenedy