Types of Customer Account

Banks offer various types of accounts to cater to the diverse financial needs of customers. These accounts differ in terms of purpose, accessibility, interest rates, and withdrawal limits.

1. Savings Account

Savings account is a basic deposit account designed for individuals to save money while earning interest. It encourages a habit of saving while providing easy access to funds. Banks offer different savings account variants, such as regular, zero-balance, and high-interest savings accounts. Withdrawals may be limited, and customers often receive facilities like debit cards, online banking, and mobile banking. The interest rates vary across banks and are subject to regulatory policies.

2. Current Account

Current account is primarily for businesses, traders, and professionals who require frequent transactions. Unlike savings accounts, current accounts do not have withdrawal limits, and they generally do not earn interest. Banks provide overdraft facilities, checkbooks, and online banking services for easy fund management. Businesses use current accounts for making high-volume transactions, receiving payments, and maintaining financial liquidity. The maintenance charges for current accounts are usually higher than those for savings accounts.

3. Fixed Deposit (FD) Account

Fixed deposit (FD) account allows customers to deposit a lump sum for a fixed tenure, earning higher interest rates compared to savings accounts. The interest rate depends on the duration of the deposit and is predetermined at the time of account opening. Withdrawals before maturity may attract penalties. FDs are a safe investment option for customers seeking stable returns, and banks offer different tenure options, typically ranging from 7 days to 10 years.

4. Recurring Deposit (RD) Account

Recurring deposit (RD) account is designed for individuals who want to save money regularly in fixed installments. Customers deposit a fixed amount monthly, and the bank provides interest on the accumulated balance. RD accounts have predetermined tenures, usually ranging from 6 months to 10 years. Withdrawals before maturity may result in penalties. RDs help customers develop a disciplined saving habit while earning reasonable returns on their investments.

5. Salary Account

Salary account is a type of savings account opened by an employer for its employees to receive monthly salaries. These accounts often come with benefits like zero balance requirements, free ATM withdrawals, and exclusive banking offers. If the salary is not credited for a specified period (usually 3 months), the bank may convert it into a regular savings account. Employees can access online banking, debit cards, and financial services like loans and insurance.

6. NRI (Non-Resident Indian) Accounts

Banks offer special accounts for Non-Resident Indians (NRIs) to facilitate seamless financial transactions in India while living abroad. The main types of NRI accounts include:

• NRE (Non-Resident External) Account: Holds foreign earnings in Indian rupees, offering tax-free interest and full repatriability of funds.

• NRO (Non-Resident Ordinary) Account: Manages Indian earnings (rent, dividends) and allows limited repatriation.

• FCNR (Foreign Currency Non-Resident) Account: Maintains deposits in foreign currency, protecting against exchange rate fluctuations.

7. Joint Account

Joint account is held by two or more individuals, commonly used by family members, spouses, or business partners. It allows multiple account holders to deposit, withdraw, and manage funds together. Joint accounts can have different operating modes, such as “Either or Survivor” (where any account holder can operate the account) or “Jointly” (where all account holders must sign for transactions). These accounts help in financial planning and shared expense management.

8. Minor Account

A minor account is opened in the name of a child below 18 years, usually operated by a parent or guardian. These accounts help inculcate saving habits in children and provide financial security. Minors aged 10 and above may be allowed to operate the account independently, depending on bank policies. Upon reaching adulthood, the minor account is converted into a regular savings account with full banking privileges.

9. Senior Citizen Account

Banks offer special accounts for senior citizens (aged 60 and above) with higher interest rates on savings and fixed deposits. These accounts come with additional benefits like priority banking, free medical insurance, and relaxed minimum balance requirements. Some banks also offer doorstep banking services for senior citizens, ensuring convenience in banking transactions. Senior citizen accounts cater to the financial needs of retirees and pensioners.

10. Demat Account

Demat (Dematerialized) account is used to hold securities like stocks, bonds, and mutual funds in electronic form. It is essential for investors who trade in the stock market. A Demat account eliminates the need for physical share certificates and enables seamless buying, selling, and holding of securities. It is linked to a trading account for executing stock market transactions. Banks and brokerage firms offer Demat accounts with various investment features.