There are many varieties of Accounts types available, and each has different features and offerings to suit the specific requirement of the customers. 

The different types of accounts and their characteristic features help in choosing the right kind of Account-based on personal or business need of a person or the business organization.

Types of Bank Accounts:

For Residents:

  • Salary Account.
  • Saving Bank Account.
  • Current Bank Account.
  • Term Deposit Account.
  • Recurring Deposit Account.
  • Resident Foreign Currency (Domestic) Account.

For Business Organizations:

  • Current or Running Account.
  • Fixed Deposit Account.
  • Project or Special Purpose Account.
  • Export Earners Foreign Currency Account.
  • Overseas Tour Operator (OTO) Account.

Trust, Association, Society, Club and NGO’s:

  • Saving Account.
  • Current Account.
  • Fixed Deposit Account.

Non-Resident Indians:

  • Non-Resident Ordinary (NRO) Account.
  • Non-Resident External (NRE) Account.
  • Foreign Currency Non-Resident (FCNR (B)) Bank Account.
  • Resident Foreign Currency(RFC) Account.

Foreign Nationals:

  • NRO Account for six months if on Tourist Visa.
  • Resident Account if on Resident Visa.
  • Based on the different categories and needs, there are different types of Accounts to serve the diverse needs of the consumers. 

Let’s discuss these accounts in little details and understand the basic guidelines behind all accounts and purpose they serve.

Types of Accounts and their purposes:

We will discuss these accounts in details and who all are eligible to open these accounts:

Salary Account:

  • Organizations holding corporate relationship with the Bank, get offers for their employees to keep Salary Account with their Bank. 
  • These Salary Accounts are Zero Balance Accounts with few other advantages as corporate offerings. 
  • In these accounts, the Employer deposits or transfer the salary of the employee every month. 
  • If the wage is un-credited for consecutive three months, then the account variant is changed from Salary account to Normal Saving Bank Account.

Saving Bank Account:

The Purpose of Saving Bank Accounts is to promote Savings, money deposit, keeping it safe and withdrawing funds whenever needed. 

Account holder earns some interest on their savings. 

These accounts are designed by the Banks to suit the different segments of the customers, such as:

  •  Unprivileged Group or Low Wage Earners such as Labors, Drivers, Household Helpers, etc.; 
  • Low Income Group; 
  • Middle Income Group; and 
  • Privileged or High Income Group. 
  • Accounts features and offers are categorized. 
  • Saving accounts can be open by Residents, Foreign Nationals, Trust, Association, Society, Club and NGO’s etc.

Current or Running Bank Account:

  • These accounts are used by Business organizations to handle the day to day operations in their business. 
  • These accounts do not earn interest due to the high flow of business transactions in these accounts. 
  • Current accounts are also available in multiple variants as to suit the need and requirement of the customer. 
  • Residents or Manufacturers, Traders or Service Providers can open these type of accounts.
  • Business Organizations also open Project or Special Purpose accounts as per the particular need arises for short term or regularly.

Fixed or Term Deposit Account:

Fixed or Term Deposit Accounts are investments made by Customers for a fixed tenure. 

These Deposit accounts could be for a tiny tenor of 7 days to a long tenure of 5 years. 

Customers can also invest in Fixed Deposits for a tenor of 5 years and avail the tax benefit under section 80C. 

Individuals and Business organizations open these Deposit Accounts.

Recurring Deposit Account:

They are special kind of Term Deposits offered by Banks to help people with regular or fixed earnings.

Start depositing a fixed amount every month in your Recurring Deposit Account and earn interest on these investments. 

It helps to inculcate the habit of savings and investment regularly.  

And it is best for low or middle-income people. Individuals open these RD accounts.

Resident Foreign Currency Account:

These accounts are of two types, such as:

  • Resident Foreign Currency Account, these accounts are for returning NRI’s (Non-Resident Indian), who have their savings and investments in foreign currency. They want to keep it in its form. 
  • Accounts are in the form of a saving/current account as per the guidelines prescribed by RBI (Reserve Bank of India) from time to time. 
  • Resident Foreign Currency (Domestic) Account, these accounts are for Residents receiving foreign currency by abroad from family members, investments, salary, unspent money or other income etc.
  • Customers can hold money in these accounts as per the current guidelines of RBI. 
  • These accounts can be open by Returning NRI and Resident as stated above.

Export Earners Foreign Currency Account:

  • Customers into the Business of Export of Goods and Services, including Software Development, Information Technology (IT) and Information Technology Enabled Services (ITES) can open this account. 
  • The accounts are kept in foreign currency and could be opened in only major currencies.

Overseas Tour Operator (OTO) Account:

  • These accounts are offered to Tour and Travel Operators organizing overseas tours. 
  • Tourists planning to travel abroad for business or leisure travel, 
  • may approach tour and travel operators and pay them in Indian National Rupee (INR) or may buy foreign exchange and pay in foreign currency for Travelling, Hotel Stay and other expenses abroad.

Non-Resident Ordinary (NRO) Account:

  • These accounts are opened by Non-Resident Indians (NRI) who are travelling abroad Education, Employment or Marriage. 
  • Any income and savings in India could get transferred to this account as the status of Resident is changing to Non-Resident.
  • INR is used to maintaing this account.

Non-Resident External (NRE) Account:

  • NRI opens these accounts, and all credits have the source of foreign earnings. 
  • Indian Currency used to open these type of accounts.

Foreign Currency Non-Resident (FCNR (B)) Bank Account:

  • NRI opens these accounts, and all credits have the source of foreign earnings. 
  • These accounts are Term Deposit Accounts, and minimum tenor for Deposit is one year, and the maximum tenor is five years. 
  • Major currencies used for deposit in these accounts.

Conclusion:

We have discussed various types of accounts as offered by Banks as per the nature and purpose of the account. 

Customers are holding their money in accounts as per the different goals, objectives and prescribed guidelines for maintaining the accounts. 

It is crucial to understand the exact nature of the transaction, use and need and basis which one can choose the suitable account for personal or business needs.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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