What are the Types of Bank Account in India
In today’s market, there are a plethora of opportunities for everyone to get a start on investing. You can either invest in low-risk products that give reasonable returns and have a better guarantee on returns or go with high-risk ones that can help you increase your wealth in a short period of time. The best type of bank account that let you convert your surplus amount into a high yielding asset to investing in high-performing stocks, the range of investment avenues in the market are wide.
Let’s take a look at the different safe investment options available to you, which gain considerable income from it over the years.
A current account is a liquid deposit account that allows flexible transactions and doesn’t come with a transaction cap that limits the number of times you deposit or withdraw money. It caters to both professionals and companies alike. This type of bank account is generally a non-interest bearing one, but this depends upon the lender, and it usually needs a higher minimum balance than that of a savings account. Keep in mind, there’s a penalty charged for every time the minimum balance isn’t maintained.
A savings account is a type of bank account that held in a financial institution that gives your principal amount security while letting you gain considerable interest rate. They are generally ideal for salaried individuals or people who have a regular source of income. They have an upper limit on the number of withdrawals and would require you to submit PAN details if the withdrawals exceed Rs.50,000. You’d be required to maintain a minimum balance, devoid of which you’d have to pay penalty according to the terms of the lender you’re banking with.
Also, Read This: Smart Investment Options to Grow Your Money in India in 2019
It’s a type of bank account that deducts stipulated amounts of money from your bank or salary account every month. The investment tenure ranges from six months to ten years and can be jointly managed by any family member. The interest is generally the same as that of the Fixed Deposit account. Senior citizens can gain an extra 0.50% interest, thanks to various schemes in play in the market. Some banks let you take a loan against the recurring deposit while offering a lower interest rate than that of a Personal Loan.
Fixed Deposit(FD) Account
With a Fixed Deposit, you deposit a certain amount of money for a fixed time period while earning interest on it. You can’t withdraw money from this account before the maturity date without getting charged a penalty and losing out on earning returns from some of the best FD interest rates in the market.
The main benefit of a Fixed Deposit is earning higher interest on the excess money you have. The amount can be deposited only once and can have a tenure ranging from 7 days to 10 years. You can use this bank account as collateral to get yourself a small loan with lower interest rates.
Now that you know the different types of bank account available in the market, make a sound decision depending on your requirements. Seek professional assistance from the financial institutions or banks you approach to get better insights about each product and process.