Types Of Bank Accounts In India You Need To Know

Types of Bank Accounts in India: Bank accounts are used to store your money safely and securely. Along with it, they also provide various services such as loans, credits, and investment options. However, there are many bank accounts, each providing various benefits and services. Read about some of the banking account options provided to customers in banks.

The citizens of India can open their bank accounts in Savings, current, demat, fixed deposit, etc. They also provide interest rates to the customers. Let us know more about them.

Table of Contents

What are Bank Accounts?

A bank account is a unique financial account maintained by banking organisations for different customers. These bank accounts allow the users to deposit, withdraw and manage their money in a safe and efficient way. There are many services provided by the banks that can easily be accessed using these bank accounts.

Transactions become easy, and there is no need to carry a large sum of money everywhere. Earning interest and growth can be attained using these bank accounts. There are many types of accounts, such as savings, current, salary, demat, etc. Users can choose any one of them based on their needs and requirements. Let us learn some of the major types of bank accounts in India below.

Also Read: What Is a Deposit? Definition, Meaning, Types, and Example

Types of Bank Accounts in India

The major banking sectors provide multiple banking account options to their customers. Let us know about them below.

1. Savings Account

This account’s main aim is to help customers deposit their savings. These accounts can easily be opened using a valid Adhar card and PAN card required to open savings accounts in different banks in India. Saving banks do not have minimum balance constraints, which is convenient, especially for students opening bank accounts.

Under Pradhan Mantri Jan Dhan Yojna (PMJDY), customers must not keep a minimum balance. They get facilities for Zero-balance accounts. Most of the private sector banks provide zero balance account options to their customers.

Types of Bank Accounts in India
Name of Account	Savings account
Minimum balance	No minimum balance is required in savings banks provided by various banks. However, in some banks, the minimum balance varies between 5,000 and 10,000.
Limit on transaction	The number of transactions can be limited.
Interest Rates	The interest rates for various bank savings accounts vary. Most banks provide an interest rate of up to 2.7% for balances upto INR 1 lakh.
Benefits	Most simple and accessible banking services to earn interest on savings.
Debit Card	Yes
Internet Banking	Yes

2. Current Account

Business owners and big corporations mostly prefer the current accounts, and have a lot of transactions throughout the month. It allows easy withdrawals and credit and also provides chequebook and debit card facilities. These bank accounts do not have any limit on the number of transactions.

Types of Bank Accounts in India
Name of Account	Current Account
Minimum balance	Higher minimum balance requirement in current accounts.
Limit on transaction	No transaction limit
Interest Rates	It is a no-interest-bearing deposit account which does not provide any interest at all.
Benefits	Unlimited transactions Overdraft Facilities Convenient banking Unlimited withdrawals Basic Current account Easy access Large payments Free 50 checks every month
Debit Card	Yes
Internet Banking	Yes

3. Salary Accounts

Big corporations open salary-based accounts to pay their employees. Their employees’ salaries are paid directly to their bank accounts every month. There is no maximum balance limit in a salary account.

Types of Bank Accounts in India
Name of Account	Salary Bank Account
Minimum balance	It is a zero balance-based account where employers can withdraw all the money from the account.
Limit on transaction	No transaction limit
Interest Rates	It is a no-interest-bearing deposit account which does not provide any interest at all.
Benefits	Unlimited transactions Overdraft Facilities Convenient banking Unlimited withdrawals Free chequebooks Demant accounts/services Phone banking Credit card offers Utility bill payments And much more.
Debit Card	Yes
Internet Banking	Yes

4. Demat Account

These accounts are used to hold the shares and securities in electronic format. They are also known as Dematerialized accounts. They facilitate easy trading of bonds and shares in the finance market. Proper KYC is required to open a demat account. There is very little paperwork required for demat account transactions.

Types of Bank Accounts in India
Name of Account	Demat /Dematerialized Accounts
Minimum balance	It is a zero balance-based account where employers can withdraw all the money from the account. You can keep your demat account completely empty at times.
Limit on transaction	No transaction limit
Interest Rates	It is a no-interest-bearing deposit account which does not provide any interest at all.
Benefits	Unlimited transactions No paper worries Easy store and transfer Easy online access Easy trading of bonds and shares.
Debit Card	Yes
Internet Banking	Yes

5. Fixed Deposit Account

The fixed-deposit bank account is a one-time deposit and a one-time withdrawal bank account. These accounts are used to get interest rates on a fixed amount for a fixed period. The rate of interest depends on the amount deposited in the account. They are the best reliable investment to save money and earn good interest over them.

Types of Bank Accounts in India
Name of Account	Fixed Deposit Bank Account
Minimum balance	No minimum balance reuqirment
Limit on transaction	No transaction limit
Interest Rates	Provides good interest on fixed money based on the period of investment.
Benefits	Unlimited transactions Risk-free investments High-interest rates Easy payment Credit offers Flexible tenures Guaranteed Returns
Debit Card	Yes
Internet Banking	Yes

6. Recurring Deposit Account

These accounts are opened when consumers want to earn profit or interest on their deposited money. The investment options are flexible and much better than the savings account. Customers can invest their money for six months to ten years. Its monthly instalment can be as low as 50 INR. However, the exact amount varies from bank to bank. You can easily add nominees and passbooks for this account.

Types of Bank Accounts in India
Name of Account	Recurring Deposit account
Minimum balance	A set amount monthly is decided at the beginning of the investment. The minimum limit can be as low as INR 1000 per month.
Limit on transaction	No transaction limit
Interest Rates	Provides good interest on fixed money based on the period of investment. Interest rates are higher than the savings accounts in most of the banks.
Benefits	Unlimited transactions Risk-free investments Savings High-interest rates Flexible tenures Guaranteed Returns Easy payment Credit offers
Debit Card	Yes
Internet Banking	Yes

7. NRI Account

These accounts are opened for Non-Resident Indians who are currently residing outside the country and want to maintain a financial bank account in India. There are three major types of NRI accounts such as Non-Resident Ordinary Account (NRO), Non-Resident External Account (NRE), and Foreign Currency Non-residential Account (FCNR).

Types of Bank Accounts in India
Name of Account	Non-Resident Indians
Minimum balance	Any amount of balance can be maintained without having any limit.
Limit on transaction	There is no transaction limit
Interest Rates	Interest rates are dependent on the taxable category. You need to invest for a year or more than that to get growth interest on your amount.
Benefits	Unlimited transactions Risk-free investments Savings High-interest rates Flexible tenures Guaranteed Returns Easy payment Credit offers
Debit Card	Yes
Internet Banking	Yes

Non-resident ordinary Rupee Account (NRO): These accounts can be used to transfer earnings from foreign to India. It can be started in the form of a recurring deposit, fixed deposit, current deposit, or savings account. It can be opened individually or with a group.

There is no limit on the deposit amount in these accounts. However, the principal and interests fall under the taxable category.

Non-Resident External Account (NRE): These accounts are used when an Indian goes to foreign countries for Jobs. Their account gets converted into a Non-Resident External Account. It can be opened together with an Indian resident. There are no minimum balance limits or transaction limits. These accounts do not fall under any taxable category.

Foreign Currency Non-Resident Account (FCNR): These bank accounts are opened for managing the international currency. It can only be withdrawn when the maturity period ends. Deposits can be made in the bank in the same currency which is earned by an NRI or person of Indian origin if the currency is under the list of approved currencies. There are no maximum transaction limits. And customers can maintain any amount of balance in their account. An NRI can open an FD and withdraw their amount after the maturity is over. The minimum deposit period is one year.

Also Read: Functions of Bank | Major Banking Functions & Services

Types of Bank Accounts: Why are Bank Accounts Important?

Bank accounts are important in many ways. We can choose from a variety of bank accounts based on the type of deposit we want to make. It provides us flexibility and makes the banking operation easier and more effective. However, let us highlight some of the importance of bank accounts below.

The bank accounts help to keep your money safe and secure.
You can easily withdraw any amount from various methods offline or online. Some of the frequently used methods are ATMs, Debit cards, credit cards or online banking.
There are mobile applications for every bank nowadays, which gives access to these banking services at the tip of our fingers.
Making payments and getting many offers are easily possible with someone having a bank account.
Bank accounts provide many services at very low operational costs.
You can also deposit your money for a fixed amount of time and earn interest on it, which will definitely grow over time.

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Types of Bank Accounts FAQs

How many types of bank accounts are there?

The major bank accounts in different banks are savings accounts, current account, fixed deposit accounts, salary accounts, recurring deposit accounts, demat accounts, NRI Accounts, etc.

Can I save money in my salary account?

Yes you can definitely save any amount of money you want in your active salary account.

Is there any interest provided on the current account?

Business people generally use current accounts with daily transactions and investments. These accounts do not offer interest rates on the balance amount. However, interest is available on savings accounts.

Is there any minimum balance requirement on the salary account?

No, you can completely withdraw all your money from a salary account easily. There are no minimum balance requirements in these bank accounts.

What are NRI Accounts?

These accounts are opened for Non-Resident Indians who are currently residing outside the country and want to maintain a financial bank account in India.