Types of Bank Accounts List

Previously, there were only four types of bank accounts that were operating in India. These bank
accounts included Current, Savings, Fixed Deposit, and Recurring Deposit Accounts. However, with
the banking sector advancements, there are other forms of bank accounts that were introduced.
These new bank accounts are DEMAT and NRI Account. Hence, the bank accounts that are currently
operating across the public and private sector banks in the country are:

● Savings Account
● Recurring Deposit Account
● Current Account
● Fixed Deposit Account
● NRI Account
● DEMAT Account
● Senior Citizens’ Account
● Salary Account

In the below section we shall cover all these forms and types of bank accounts in detail:

1. Savings Account
As we see, the savings account can be opened either by an individual or jointly by two individuals
with a prime objective of saving money.

The main advantage of opening a savings bank account is that it pays the customer a sum of
amount in the form of interest against opening this type of savings account.

Features of Savings Bank Account:

○ No limit of the number of times the account holder can deposit money in the account.
However, there is a restriction on the number of times money can be withdrawn by the
account holder.
○ The rate of interest varies from 4% to 6% per annum
○ No minimum balance required to be maintained.
○ Internet bank service is provided
○ Account holders are provided with an ATM/ Debit/ Rupay Card
○ Savings bank account is further categorized as Basic Savings Bank Deposit (BSBDA) and
Basic Savings Bank Deposit Accounts Small (BSBDS)
○ Such a type of account is suitable for students, working professionals, housewives,
pensioners, etc.

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2. Current Account
Current Account is the second type of bank account. Such an account is not used for the purpose of
savings. It is only opened by businessmen who have a larger number of general transactions with
the banking organization.

Features of Current Account:

○ Apart from businessmen, current bank accounts are opened by associations, companies,
institutions, religious institutions, etc.
○ There is no fixed number of times that the current bank account holders can deposit or
withdraw money from it.
○ Internet banking feature is available.
○ It does not have any fixed maturity
○ Overdraft facility is provided
○ There is no rate of interest paid on current bank accounts.

Check the Difference Between Current Account and Saving Account now!

3. Fixed Deposit Account

Fixed Deposit or an FD account is the third type of bank account customers can open in any public or
private sector bank. It provides investors a higher rate of interest than the regular savings account on
the given maturity date. It may require the creation of a separate account altogether.

Features of Fixed Deposit Account

○ It is a one-time deposit and take away account.
○ The account holder needs to deposit a fixed amount of funds for a fixed period of time.
○ The amount deposited in a fixed deposit account is withdrawable just once and not anytime
as per the account holders’ requirements.
○ A certain amount of interest is paid on the fixed deposit account
○ The rate of interest of a fixed deposit account depends on the amount deposited and the
time duration for which the amount is deposited.
○ The bank is liable to repay the full amount deposited in the FD before the maturity date.

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4. Recurring Deposit Account

Recurring Deposit or RD account is a type of account in which the account holder is required to
deposit a fixed amount of money every month till the time it reaches the fixed maturity date. The
account is an investment tool that encourages people to make regular deposits and receive decent
returns on their investment.

Features of Recurring Deposit Account

○ It is the regular deposit factor and the interest aspect that the account provides flexibility and
ease of investment to the account holders.
○ The RD account can be opened by any individual or an institution either jointly or separately
 ○ Regular monthly instalments to be added can range from as low as INR 50 to any amount
from one bank to another
○ The account can be opened ranging from 6 to 120 months.
○ Its rate of interest varies from bank to bank
○ The Recurring Deposit Account provides the nomination facility as well
○ Account holders are issued passbooks to know their account summary on a regular basis
○ The bank can deduct a sum of the amount as a penalty if premature withdrawal of the
amount is made.

4. DEMAT Account
The DEMAT Account constitutes the shares and securities held in electronic form. The DEMAT
account stands for Dematerialization Account. Such accounts are maintained by two depository
institutions, the National Securities Depository Limited and the Central Depository Services Limited.

Features of DEMAT Account

○ Such accounts help easy trade of share and securities
○ They facilitate conducting stress-free transaction of share
○ Opening of the DEMAT Account requires the KYC procedure
○ The transaction cost is reduced
○ Traders can work from any location
○ The transfer of securities can be done with less paperwork

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5. NRI Account
The option of the NRI Account is provided by both public and private sector banks to fulfill the
banking requirements of a non-residential Indian or a person of Indian origin. An NRI account allows
overseas transfer of funds to India and holds the funds in Indian rupees.

Features of NRI Account:

○ NRI account enables free repatriate of funds without any restrictions
○ It also allows easy investment in the Indian investment instruments like FDI, FPI, FII, etc.

Types of NRI Accounts

○ Non Resident Ordinary Rupees (NRO) Account: It allows transfer of foreign earnings easily to
India. This account can be opened in the form of Savings/ Current/ FD/ RD account. NRO
accounts can be opened by an individual or a a group of persons
○ Non Resident External Rupees (NRE) Account: This account comes into existence when an
Indian citizen moves abroad for employment. Their existing bank accounts are then
converted into NREs. It can be jointly opened with an Indian resident as well.
○ Foreign Currency Non Resident (FCNR) Account: This account can be opened to manage an
international currency. FCNR can only be in the form of Term deposit and can be withdrawn
after its maturity.
6. Senior Citizens’ Account
People above 60 years of age are considered as senior citizens as per the government’s directives.
Senior Citizens’ accounts are normal savings accounts with the difference that an interest benefit
ranging from 0.25% to 0.50% p.a. Is decided by the respective banks from time to time for the
beneficiary account holder.

The Senior Citizens’ accounts are opened as joint accounts, the first name in the account should be
that of a senior citizen only then the benefit of the same goes to the senior citizen. The accounts
under the senior citizen scheme are applicable to only those senior citizens who are residents of
India.

7. Salary Account
A salary account is a type of bank account designed to facilitate the smooth transfer of monthly
salaries from employers to employees. Salary accounts offer a financially convenient environment
for both employers and employees.

Features of Salary Account:

○ Primary features of a salary account is the direct credit of monthly salaries by employers.
○ Salary accounts generally have low or no minimum balance requirements

Benefits of Salary Account:

○ Salary accounts usually come with minimal or no fees for account maintenance,
transactions, and ATM withdrawals. This helps employees save on banking costs and
ensures that the bulk of their salary remains accessible for personal use.
○ A salary account offers opportunities to access financial products and services offered by
the bank like personal loans, credit cards, or investment options.

Know the Difference Between Salary Account and Savings Account now!
Importance of Bank Accounts
Bank accounts are opened to manage the finances of individuals, companies, institutions, and so on.
Below are the reasons why a bank account must be opened:

○ Simplicity of transactions as account holders can easily withdraw money and make
payments through their respective accounts.
○ Bank accounts offer a safe treasury of hard-earned money. Even if the bank shuts down,
account holders get their money back
○ Most banking organizations offer the account holders free or low cost services
○ It is an easy and reasonable way to grow money. Mostly every bank offers an interest rate
wherein account holders can earn interest if they deposit money in the savings bank
account.
○ Bank accounts offer easy access to credits. Having a bank account opened is beneficial as
banks provide easy credit access to its customers for all kinds of loans as well.
Banking and finance aspirants must go through all the information elaborated in this article carefully
as types of bank accounts form an important part of the banking awareness topics.

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