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Baroda Basic Savings Account
Basic Savings Account
If you want to open a bank account where you are not required to maintain a minimum balance every month, you can open a basic savings account. Introduced to encourage more financial inclusion, in other words, have more people become part of the banking system, a basic savings account offers basic features like deposit and withdrawal, a debit card and internet banking facility. But there is no minimum balance requirement. There are some other features of a basic savings account that vary slightly from bank to bank.
Benefits of a basic savings account
No charges for not maintaining minimum balance
The major benefit of a basic savings account is that unlike other savings accounts, you will not be fined for not maintaining minimum balance.
Cheque book
The deposit account holder will receive a 15 leaves cheque book while opening this account for no extra cost. The account holder will receive 30 cheque leaves free in a financial year.
ATM-cum-debit card
You will also get a Rupay Classic debit card free of cost that can be used to withdraw cash from ATMs or at points of sale when you make purchases.
Free passbook
The passbook facility is also available to you for free on opening a basic savings deposit account.
No charges for dormancy
You will not be charged for a dormant or non-operational account.
Free registration for standing instructions
Basic savings deposit account holders will get a free registration for standing instructions and execution from the same branch. They will have to pay charges for any other branch within the same bank or other bank.
Features of a basic savings account
Anyone can open it
Anyone can open a basic savings deposit account after furnishing all the documents to complete KYC (Know Your Customer) norms. But please note, that if you open a basic banking deposit account and you already have regular savings accounts with the bank, you will have to close the regular Savings accounts within 30 days of opening the basic savings deposit account. You will also have to submit a declaration to the Bank stating that you are not maintaining any BSBD account with our/ any other Bank.
Zero balance account
Basic savings account is a zero balance account where you are not penalized for not maintaining a specified account balance, like the regular savings accounts.
A Bank of Baroda basic savings deposit account has the following features-
30 cheque leaves in a year for free.
Debit cum ATM card at no cost however, annual fee will be applicable from second year onwards.
Internet banking facility
Four withdrawals allowed in a month for free (including ATM withdrawals from own/ other Bank’s network)
Account holders can provide standing instructions to the bank
Interest rate, tenure, application of interest is the same as regular savings accounts
No charges for dormant account or inoperative accounts.
Regular KYC norms will apply for basic schemes as well.

Baroda Pensioners Savings Bank Account
Pensioners can avail the Bank of Baroda Pensioners Savings Bank Account. This is an ideal retirement savings account. All pensioners, including Bank of Baroda staff pensioners may open this account. The Baroda Pensioners Savings account is especially created to provide necessary banking facilities and benefits to pensioners and is meant only for savings oriented transactions.
Key features of the Baroda Pensioners Savings Bank Account
Initial deposit:
The pension savings account can be opened with a minimum deposit of Rs. 5 only.
Free pass book and cheque book:
All account holders are provided with a free passbook and chequebook with an unlimited supply of cheque leaves. The free cheques facility is only reserved for the literate pensioners.
Debit card:
All account holders get a debit card which can be used for cash withdrawals, ATM transactions, balance enquiries etc. The debit card can also be used for making online and retail transactions.
Overdraft facility:
Pensioners may avail overdraft facility up-to a maximum of 2 months’ pension amount as per the net credit to savings account in the previous month, only if no other credit facility is availed by the pensioner.
Benefits of the Baroda Pensioners Savings Bank Account
No Minimum Balance requirement in the account.
Net banking
Customer get access to net banking facility for paying utility bills, online shopping and making other online transactions.
Outstation cheque
Customers can enjoy immediate credit of outstation cheques for up to Rs. 25,000
Nomination facility
Nomination facility is also available under this account
Cash deposit
Customers can deposit unlimited cash in their home branch and up-to ₹25,000 in outstation branches free of charge.

Baroda Premium Current Account-Privilege (BPCAP)
The Baroda Premium Current Account-Privilege is an ideal account for customers who own medium to large businesses. Account holders can avail several free services and benefits under the BPCAP account. The privilege current account is designed to meet several specific needs of customers holding the account. Immediate credit of outstation cheques and auto payroll are some of the key benefits offered with this account.
Key features of the Baroda Premium Current Account-Privilege
Free cheque books
BCAP account holders can obtain free unlimited chequebooks for their transactions.
Account statements
Account holders can get free account statements, twice a month.
Free facilities
BCAP account holders get free banker’s cheques, balance certificates, MT/TT facilities and signature verification facilities. They also get free auto payroll, internet banking facility, SMS alert and missed call facilities. Folio charges on the account are also waived off.
Fund transfer
No charges are levied for funds transferred at BOB’s Core Banking Solution branches.
Auto and reverse sweep facility
Account holders can deduct a minimum amount of ₹25,000 through the auto-sweep facility, provided their balance has crossed ₹5.25 lakh. Reverse sweep facility is also available.
Free Cash withdrawals
Free unlimited cash withdrawals at home branches however up-to ₹50,000 are permitted per day at non-home branches only for withdrawals made through self-cheques
Benefits of the Baroda Premium Current Account-Privilege
Account holders get a debit card (for Individual & Sole Proprietorship accounts only) with annual charges waived off for the first year
Outstation cheques of up-to ₹1.5 lakh are credited immediately credited for customers holding the account for a period of 6 months and above
Account holders are provided with a free credit card with annual charges for first year, waived off
Account holders receive a complimentary personal accident insurance cover with the credit card
Loan processing fees are waived off for car loans disbursed in the name of the firm or proprietor
20% discount is offered on BOB locker rental charges
Free standing instruction against account service if offered with the account
Nomination facility is offered with the account

Current account vs savings account
Having a bank account is essential for modern-day living. You need it to receive and make payments, and there are very few transactions that do not require a bank account. Of course, cash is still king in India for large sections of the population, but the number of those people is steadily declining. Besides, Internet banking has made banking so much more convenient, allowing people to carry out most transactions online, without the need for messy paper bills and cheques.
The majority of bank customers open either a current account or a savings account. Some people get confused between the two terms and are unable to tell the difference between current account vs savings account. Of course, these are very different, and it’s important for you to understand what is the difference between current and savings account? Here are some of the differences:
Current vs savings account
Purpose: A current account is intended for those who do business, like shopkeepers, traders, companies and service organisations. Generally, the volume of transactions in a current account is very high. A Savings Account, on the other hand, is meant mainly for individuals, who deposit their salaries/ income in the account and use it to pay their personal and household bills.>
Interest: Generally, since a current account is opened for business purposes, funds deposited in it do not earn any interest. However, some banks offer a sweep-in facility to its customers. Any sum that is over a certain limit is automatically put in a fixed deposit, which earns some interest. A savings account, on the other hand, offers interest on funds deposited. Of course, this is not very high, ranging from 3.5-6% per annum, which might not even be enough to cover inflation. Interest is calculated on the daily outstanding balance. However, the interest earned is credited to your account not daily but every quarter or half year.Of course, if you want higher interest rates, you could deposit any excess funds in a fixed deposit. A savings account should be used mostly for carrying out transactions, and is not preferred as an investment avenue.
Balance: You need to keep a certain minimum balance in most accounts, except in those classified as zero-balance accounts. Generally, banks require its customers to keep a larger minimum balance in current accounts compared to savings accounts.
Overdraft facility: Current Accounts offer an overdraft facility that savings account do not. Businesses generally conduct a lot of transactions every day. Sometimes, there may be a mismatch between deposits and payments, or the funds in the account may not be enough to meet payments. To bridge this gap and prevent cheques from being dishonoured, the bank may allow an overdraft facility, a sort of bridge loan, for a short period.
Withdrawals: There no limit on withdrawals from a current account. In a savings account, on the other hand, the bank will allow you only limited number of withdrawals, after which you may have to pay some charges.
To sum up, the difference between current and savings account is that they target different types of customers, who will have different needs. A businessman will open a current account because his need is mainly for liquidity to handle huge volumes of transactions. An individual who opens a Savings Account, on the other hand, won’t feel the need for a large number of transactions and may want to earn some interest on the amount deposited.
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Kids Bank Accounts - Features and Benefits
With advancements in banking technology, there are different types of savings accounts that are available to the people. One such type of savings account is a kids bank account. A Kids Bank Account is an account that can be operated by a child below 18 years. The child can thus imbibe a financial savings habit from early on.
Features of a Kids Bank Account
This bank account can be opened for children below 18 years. For children below 10 years, the account can be opened but can’t be operated by the child unless it is jointly operated by the parent or legal guardian. Once the child crosses 10 years, he can manage the account.
The kids bank account becomes inoperative after the child becomes a major. However, banks give the accountholder an option to convert their kids bank account into a regular savings account.
The child gets some of the features provided in a regular Savings Account such as cheque book, pass book and ATM card. However, these come with restrictions.
The kids bank account is linked to the parent or the legal guardian’s account. Each month or at a fixed interval, a sum of money is debited from the linked account to the kids bank account. This way, there is always balance in case the child spends money on the debit card. This linking feature is not available in all Banks.
Each bank has its own limits on the ATM withdrawal allowed and the per day spend allowed in a kids bank account. These safeguards prevent misuse of this account and the possibility that the child will spend more money than a particular limit.
The bank may provide a login Id and a password so that the child can operate internet banking. However, the bank usually gets a signed mandate from the parent or legal guardian before it issues the login ID and password.
These accounts must have a certain minimum account balance. The minimum account balance differs from bank to bank. In case the minimum bank account is not met, the bank charges a penalty.
The bank sends an SMS to the parent or legal guardian every time a transaction is performed in relation to the kids bank account. This helps maintain control.
How to open a savings account for kids
The procedure on how to open a kids bank account is extremely simple. The first step is to find out which bank to open the account with. It is better to open a savings account in a bank in which the parents or the legal guardian have an account. This helps the bank to link the two accounts and to put in a standing instruction to auto debit the parents or guardian’s account for funds (if linking facility is available).
Once the bank is decided, the account can be opened by filling up an account opening form on the bank’s website. Once this form is filled up, someone from the customer care department of the bank will contact you to get documents from you. Some of the documents required are:
KYC documents for parent or legal guardian
KYC documents for child
Passport size photographs of the child
Duly completed application form
In case an online application procedure is not possible, you can visit a branch, fill the form and submit the documents to open a new account.
Benefits of Kids Bank Account
A kids bank account is an excellent way to teach your child fiscal responsibility. Through this bank account, your child can learn how to operate a bank account, especially when the funds are limited.
This account teaches a child the value of budgeting since there is a limit on the transactions that can be done every day. There is also a limit on the funds in the account and a minimum account balance that has to be maintained.
Some Banks provide free insurance for the child on opening the kids bank account
Banks may have auto sweep in facility that converts excess balance into a fixed deposit so that the earnings on the account are maximized.
Kids Bank Account Tax Implications
As per the Income Tax Act, 1961, a child’s income from investments made in his name by parents is clubbed with the parent’s income. Unless the income is from the child’s own skills, in which case it is taxed in the child’s name.
Whatever interest is earned on the savings account balance or the fixed deposit through sweep in, will be clubbed with the parent or the legal guardian’s income. This income is clubbed with the working parent’s income. In case both the parents are working, this income is clubbed with the parent whose income is higher.
However, the Income Tax Act also exempts Rs. 1,500 per child for clubbed income. This provides a little bit of relief from taxation. It is important to consider children’s bank account tax as well before opening the account. However, the benefits of opening an account and teaching your child financial lessons trumps the amount paid in terms of tax on savings bank account interest.

Saving accounts features
What are the features of a savings account?
A savings account is the first step a person takes toward saving. As the name suggests it is a place where the savings are stored but it is not an investment.
The savings account is the conduit through which investments can be made. But the first step starts from taking the money out of your money box and into a bank.
Why have a savings account?
Rather than keeping money at home in your money box, keeping it in a bank is suitable as it offers interest on the deposit made. This is the main reason why you have a savings account. The interest rate is not high, but it helps in partially softening the blow of inflation. In other words, the money one deposits in the bank are working to give you some return. Not only is the money in the savings account safe and earns interest it has other advantages also.
Features of a savings account
The following are the features of savings account
First, the money can be withdrawn at any point in time. With ‘Any-Time-Money’ (ATM) counters available across the country, a saving bank account holder who has debit/ ATM card facility can withdraw money from anywhere in the country. This adds a safety element where the depositor need not move around carrying cash in his pocket.
With e-payment on the increase, the saving bank account helps in regular monthly payments like that of electricity, society maintenance, telephone and mobile bill payment, insurance premium payment among others.
Salaries can be directly credited to the savings bank account. This helps both the employee as well as the employer. For the employer with a single click of the button, money is transferred to all the employees. For the employee, they are saved the travel to the bank as well as can have the money credited in their account at a faster pace.
Post-retirement the same savings bank account helps in getting a regular pension.
Loans that a person takes are generally linked to the savings bank account which is the primary account where his salary is deposited. Direct electronic instructions can be given from the savings bank account or Post Dated Cheques (PDCs) from this account. Savings bank account often eases the process of availing loans.
Cheque bounce history of the customer’s savings account tells his creditworthiness. A customer with no defaults on loans on his name has a much higher credit rating and finds it easier to get loans.
Having a savings bank account encourages the habit of saving rather than keeping cash in hand. This discourages impulsive shopping.
Savings account helps in accessing other financial instruments like online trading, mutual funds investments through direct transfers among others.
A standing instruction can be given to the bank where if the amount in the Savings Account crosses a particular threshold it will be transferred to any other higher yielding instrument.
It helps in making travel plans easier by booking tickets as well as hotel bookings through online mode.
The passbook or electronic statement of the savings bank helps in keeping an automatic tab of where the money came from and where it was spent.
At the end of the year, it helps in filling your tax returns with the income tax authorities. Since all the transactions are recorded in the bank statement, a salaried employee has the little hassle to file his returns.

Savings Account- Features and Benefits
A savings bank account is the most basic bank account available. It is an account that allows you to pool in your finances and manage them. The funds are available to be withdrawn at any time. With the different needs and requirements of the customers, banks have begun offering different kinds of savings accounts to meet these different needs. Some types of savings accounts are:
Regular savings account
Salary accounts
Kids savings account
Womens Savings account
Institutions, Government savings account
Basic Savings Bank Account (BSBD)
Senior Citizens Savings Accounts
Rural Savings Accounts/ Jan Dhan accounts
Here are some features of savings account:
A savings account comes with a passbook and cheque book feature
You can receive payments and make payments from your savings accounts
Auto debits and auto credits can be set up from your savings accounts
Savings bank account holders can access internet banking and mobile banking for their needs
Banks offer ATM cum debit cards to savings bank account holders
A savings bank account earns low interest rate but allows the customer the freedom to withdraw funds at any time subject to a limit on monthly withdrawals.
It is possible to pay bills from your savings account
Banks also send transaction alerts to their customers via SMS and email
What are the benefits of a savings account?
While a savings account has a lot of utility, it only earns interest at 3.5% to 6% per annum. In such a case, are there any benefits of having a savings account? The answer is yes. There are many benefits of opening a savings account. Let us consider them.
Here are the benefits of having a savings account:
Liquidity
One of the benefits of opening a savings account is that it offers you liquidity..
Safety of funds
A savings bank account is a safe avenue to keep your funds rather than keeping it on hand where it is susceptible to get lost or stolen. Another important point to remember is that each account is insured by the Deposit Insurance and Credit Guarantee Corporation for up to Rs. 1 lakh.
Additional earnings because of auto sweep facility
Most banks have an auto sweep facility where funds above a particular limit are automatically converted into a fixed deposit. These funds earn interest at fixed deposit rates as compared to regular savings rate. By enabling this feature, the depositor can get full benefits of keeping money in a savings account.
Automatic debits for payments
Banks allow customers to set up automatic debits for utility payments and bills. In such cases, the utility company or telecom company raises a demand with the bank and the bank automatically debits the bank account. This is a convenient way to make payments on time. When you take a loan, you can set up an auto debit facility from your savings account where the installment will get debited from the savings bank account and
Auto credits for investment incomes
One of the benefits of keeping money in a savings account is that it can be linked to a demat account and other investments. In such cases, the income from dividends and interest gets automatically credited to the bank account. This convenience ensures all incomes get pooled in one account.
Convenient fund transfers
It is extremely simple to make fund transfers from a savings account. There are different modes of a fund transfer which are easily available in both internet banking and mobile banking. A savings bank account holder can transfer funds using NEFT, RTGS, IMPS and UPI.
Joint accounts
There are benefits of a joint savings account. Having a joint account provides greater flexibility since all the joint holders can sign cheques and operate the bank account. It makes it easy to track spends and incomes. A joint account can be maintained for household incomes and expenses which is excellent for financial planning.

Savings account opening
Want to open a savings account? Follow these steps
A savings account is perhaps the first interaction a person has with a bank. It is the most basic of bank accounts. It offers the safety that a depositor looks for, plus interest rates and the flexibility of withdrawing money anytime and anywhere.
Before looking at the features of opening a bank account let’s first look at how to open one.
How to open a savings account
There is two main ways to open a savings bank account:
Walking to a branch
You can go to your nearest Bank of Baroda branch and ask the bank officials how to open an account. You are asked to fill out a form. The bank official will ask for details required as per the ‘Know Your Customer’ (KYC) format that includes address proof, identity proof, statutory government registrations like a PAN card will be required along with your photographs. You will also be asked if you want to open a joint account with anyone else. In the case of a child, a minor account is opened that is operated by the parent.
Online
If you want to open your savings bank account online, you can do so either through a computer or a mobile way of opening a form. Most details are captured online in this case with a minimum physical interface with the bank.
Who can open a Savings Bank Account?
Each bank has its own Terms and Conditions which needs to be satisfied before an account is opened. Most of these conditions are common and set by the central bank – Reserve Bank of India.
At the time of opening an account, you will be made to sign a number of documents which include that he has understood all the Terms and Conditions of the bank. It is thus necessary to read through the document before signing. Only illiterate depositors can use their thumb impression.
Signature and KYC Documentation
Bank signature is the key to operate the account. Signature mismatch not only leads to heartburns but also other problems which can result in blocking of the account. You will need to be careful while signing the form and maintain this signature throughout life.
KYC Documentations have increased over the year. The main documentation needed is for the identity of the customer and identifying his address.
In identity proof the documents that are generally valid are – passport, driving licence with photograph, Permanent Account Number (PAN Number), Voters identity card, Job card issued by NREGA (National Rural Employment Guarantee Act, 2005) – attested by a government official and an Aadhar card or any other document issued by the Unique Identification Authority of India.
For address proof, you can submit any of the above documents apart from the PAN card
Pass Book
Banks can offer Pass Book facility for a savings account holder for free or for a small fee. You, however, can access the statement of your account online using internet banking.
Safety of savings accounts
Savings account in a bank is generally insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC).This insurance facility offers an assurance that your money is safe.
Types of savings account
Within the savings account, different banks offer a variety of accounts depending on the utility of the account and the age of the account holder.
Some banks offer a zero-balance account, but these are done for salaried accounts or for some professionals and students.

Savings vs Current Accounts the key differences
Opening a bank account is one of the first steps we take towards financial independence. We start with small savings that we deposit each time we come upon extra money by opening a savings account. As our financial requirements change, we find the need to open an additional account, to conduct daily transactions especially business transactions. Such an account is known as a current account. In this article, we shall highlight the major differences between savings and current account and understand the procedure to link your Aadhaar card with either account.
Savings and current accounts – how they differ
Both, savings and current accounts come with their own set of features which makes them different in several ways. Both accounts are meant to address the various financial needs of account holders. Let us look at the significant factors that distinguish the current account and savings account.
The purpose of the accounts: Savings accounts are designed by banks to encourage savings among account holders, whereas the current account is intended for people who need to make frequent transactions especially for business purpose.
The type of account holder: Savings account are best suited for individuals with a steady source of income; salaried employees, for instance. This type of account is an excellent option for anyone with short-term financial goals in which one can keep depositing or withdrawing money as per their requirements. The government encourages everyone to open savings accounts. Current accounts, on the other hand, are best suited for people in business, companies, firms, organisations, public enterprises and so on. They are meant for people who need to carry out repeated money transactions.
The frequency of transactions: Individuals, who have a savings account, are permitted to make a limited number of transactions every month. You typically get 3 to 5 transactions every month, including financial transactions like fund transfers, cash deposits and withdrawals to non-financial transactions such as getting account statements, ordering cheque books etc post which you are charged a certain amount for each transaction. The difference between current account and saving account in this respect is that you can carry out unlimited monthly transactions of all kinds.
Interest: You can earn a quarterly, half-yearly or annual interest of 3.5% to 6% per annum (depending upon your bank and account type) on your savings account. You are also allowed to accumulate an unlimited amount of funds in these accounts. On the other hand, you do not earn any interest on the monies parked in a current account.
Average minimum balance: Each bank asks the account holder to maintain a fixed sum of money or minimum balance into their accounts. One has to pay a penalty for non-maintenance of minimum balance. You are usually required to maintain a low minimum balance in savings account, (which can even be zero in case of a salary/ zero-balance account), whereas as current account holders are required to maintain relatively higher minimum balances.
Now that we have highlighted the main differences between the two accounts let us understand how to link Aadhaar card with bank account (for DBT benefits only). You can visit the bank and follow the below steps
Ask for an Aadhar linking application form at the bank; enter your current/savings account details and Aadhaar Number.
Attach a self-attested photocopy of your Aadhaar card with the application and carry your original Aadhaar card to furnish to the bank for verification purposes.
The bank will accept your request and link your account to Aadhaar.
You will receive an SMS notification from the bank when the Aadhar link to bank account is successfully completed.
You can also link your Aadhaar card to your bank account through internet banking by going on the “My Account” section and entering your Aadhaar card details and verifying using OTP or through your mobile banking app in the same way
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Things You Will Need To Open A Bank Account
A leading bank like Bank of Baroda offers a bouquet of savings accounts that you can pick from to park your salary and income from other sources with, while earning some interest based on the type of bank account you choose to open.
At the end of the day, your needs are as unique as you. From daily transaction to fulfilling your professional goals, our savings bank accounts are one stop solution for all your needs. Access your account and transact from anywhere, anytime with our digital banking services.
Before you do that, here are a few documents you will need to keep handy to open a savings bank account.
What are KYC norms?
Know Your Customer norms apply to everyone who wishes to open a bank account. KYC is certain basic information that the banks need to have about the applicant. This information is backed up by necessary documents submitted by the applicant to authenticate his/her identity. This is basically to weed out potential frauds and monitor suspicious high value transactions that may be related to illegal trades, money laundering or other financial scams.
The documents you will need to submit while applying for a bank account are-
Proof of identity
For this, you can provide
Passport
Voter ID Card
PAN Card
Government/Defence ID Card
Driving License
Pension Payment Orders issued to the retired employees by Central/State Government Departments, Public Sector Undertakings
Photo ID Cards issued by Post Offices
Photo identity Cards issued to bonafide students by a University, approved by the University Grants Commission (UGC) and/or an Institute approved by All India Council for Technical Education (AICTE)
Proof of address
You can provide any of the following as proof of address
Passport
Driving license
Salary slip
Income tax assessment order
Utilities like electricity bill, landline bills-not older than 2 months.
Bank statement
Letter from employer/public authority (should be validated by bank)
Ration card
Voter ID card
Retired government employees can produce pension payment orders
Registered leave and license agreement or sale deed or lease agreement.
Please note, every time there is a change of address or change in any other detail furnished to the bank, the applicant will need to immediately notify it to the bank along with updated document proofs.
PAN card
2 latest passport size photographs
The Next Steps
After having all the documents in place, applicants need to fill up the bank account opening form. Fill up all the mandatory fields. For questions or enquiries about the form, a customer representative is always available for help during the branch’s working hours.
Now, the application form along with the above documents needs to be submitted at the bank branch. Applicants should keep the originals with then, which will be required for verification purposes.
Bank executives examine and verify the documents and that the details submitted in the form matches with that on the document proofs like name, date of birth, address, signature among others.
Applicant may be asked to make a token deposit for account opening. This does not apply to zero-balance accounts.
The applicant will receive a debit card and other welcome literature on the address submitted by them in the application form.

Types of Accounts and Deposits
What are the types of accounts and deposits available?
It’s important to know where you can save your money. As the rule goes, high-risk on your capital can result in a higher return while investing money in low-risk instruments would result in lower interest.
Banks, including Bank of Baroda offer a host of instruments that are what can be termed as low on risk and medium to low on return.
We shall now look at the various instruments that are available to a customer to deposit their money with the bank and earn returns.
Types of Deposits
A primary function for a bank is to mobilise public money. They do so in the form of deposits. There are two types of deposit accounts that you can open in a bank. They are time deposits and demand deposits.
Time Deposits
A Time Deposit also known as a Term Deposit is a deposit which has a fixed tenure and earns interest for the customer. The tenure varies for each instrument and may even change from bank to bank.
The most widely used name for time deposits is Fixed Deposits. The common feature among all Time deposits is that they cannot be withdrawn prematurely. One should thus plan their deposits according to their requirement for money going forward.
The more the money resides in the bank of a term deposit the more interest it earns. Banks pay higher interest in longer-term deposits than on shorter ones.
Fixed Deposits earn higher interest than a Savings Account because the former gives Banks leg room to lend to people who need the money for roughly the same time limit. For example, a one year fixed deposit in a bank can allow the bank to lend money to a person who requires a personal loan for one year period.
Commercial banks have over the years made Fixed Deposits more attractive by offering various frills like overdraft facility, zero cost credit cards, nomination facility, safe deposit lockers, internet banking among others.
Recurring Deposits
In this case, a fixed amount, as decided by the depositor, is deposited at regular intervals till the end of the tenure. The accumulated interest and the principal is given back to the depositor at the end of the tenure. The tenure of a recurring deposit can be anything from six months to 120 months.
Demand Deposits
As the name suggested, you can withdraw this deposit on demand. Such funds are held in accounts where it is easier to withdraw money either by going to the bank or an ATM. Savings and Current accounts are the two types of commonly used Demand Deposits account,
In such type of deposits, the risk is low but so is the return. However, there is one more factor that this type of deposit has and that is liquidity since money can be withdrawn at a moment’s notice.
The reason for the existence of such accounts is to provide the customer convenience of meeting his daily requirement of funds. It does not serve the purpose of ‘investment’ or ‘wealth creation’.
TYPES OF ACCOUNTS
Savings Account
These are interest-bearing accounts where the rate of interest depends on the bank where it is deposited. Further, there are restrictions in terms of the number of times money can be withdrawn from this account. These restrictions are also imposed by the bank and may vary between two banks. The depositor can withdraw his money by going to the bank and use the withdrawal slip or use his cheque book or go to an ATM and use his card. Money can also be transferred to someone else by using the cheque facility or using an electronic mode of transfer.
Current Account
This type of account is generally operated by companies and firms. These are the non-interest-bearing deposit and serve the purpose of providing liquidity. Since there are many transactions in these accounts, the cost of managing them is high. Hence banks ask the depositors to maintain a minimum deposit. Current accounts have overdraft facility which the banks provide the customers to meet their short-term liquidity mismatch.

What is current account
Banks offers several kinds of accounts to customers depending on their needs. Two of the most popular are savings account and current account.
So what is current account? Current account is for those who have a very high volume of transactions – whether debit or credit. Hence it is meant for conducting a business, and generally opened for businessmen, traders and service providers. Sometimes current accounts are also called demand deposit accounts. No interest is paid on these accounts, sometimes even a fee is charged for banking services.
To understand the current account meaning, let’s look at its various features.
High liquidity
Current accounts are meant to ensure a high level of liquidity. Money flows constantly in and out of an account. Customers use it not as an investment, but as a tool to facilitate daily business transactions. They issue cheques to those with whom they have business dealing, and, in turn, receive cheques from them.
Interest rates:
One feature of a current account is that deposits made in it does not earn interest. This is because, as we have pointed out earlier, the current account definition is that it’s a tool for conducting business, not an investment avenue. On the other hand, a savings account earns some interest for customers – albeit small. However, there are some banks that offer a sweep-in facility. That is, if the balance reaches a certain level, it is automatically transferred to a savings account or a fixed deposit, where it can earn some interest.
Overdraft
When you are finding out what is current account in bank, you need to understand the concept of an overdraft. Business transactions are quite fluid and rapid, and sometimes there could be a gap in the inflows and outflows. Banks in that case provide an overdraft facility so that any cheques issued are not dishonoured.
Difference between savings account and current account
Now that we explained what is meant by current account, let’s compare it with a savings account. How different are the two accounts?
Interest rates: Savings banks offer interest to encourage customers to save. Current account is focused on money flows, so no interest is offered. In fact, charges may be levied.
Target customers: The target customers of a current account are businessmen, traders and service providers. Savings accounts are meant for individuals, especially for salaried persons with a monthly income.
Minimum balance: Both savings accounts and current accounts require a minimum balance to be maintained. However, this is higher in the case of current accounts.
Overdraft: While a current account offers overdraft facility, no such facility is available in a savings account.
Number of transactions: The number of transactions allowed in a current account is quite large. It’s much smaller in the case of Savings Accounts
Advantages of current account
Enables businesspersons to keep the flow of money smooth, and get and make payments on time.
Overdraft facilities are available to tide over any temporary cash flow issues.
Internet and mobile banking enable smooth and error-free transactions.
Very handy for large volume of transactions.
All Indian banks offer current account facilities. You can open one in any bank by completing formalities like submitting PAN card, Certificate of Incorporation, address proof of the company, ID and address proof of partners and directors etc.

What is savings account
Most Indians are familiar with bank accounts, and most of you will have a saving account. Let’s look at saving account meaning, how you can open one and make the best of it.
Banks have many types of accounts, the main ones being current account and saving account. The saving account definition should give you some indication about what it’s all about – it’s about saving. Of course, there’s more to a saving account that just that. So let’s find out what is a saving account and its features.
A saving account is meant for individuals and salaried people to meet their personal requirements. The main function is to ensure liquidity. It enables you to make and receive payments. For example, you deposit the cheques you receive in your saving account, and use the account to make payments. And when you need cash to meet your day-to-day requirements, you just withdraw it from your savings account.
Most banks today offer Mobile and Internet banking, so the process of making and receiving payments has become so much easier. You hardly need to visit the bank branch to make any transactions. You can withdraw cash from an ATM, can transfer funds online to pay bills, make purchases, send money to your family in another city etc.
So the saving account meaning includes liquidity and saving. But the emphasis is more on liquidity. Sure, your saving account does offer you interest on the balances you keep in it. But these are on the lower side, ranging from 3-6 percent. This will not cover even the inflation rate, and the real value of your money will diminish if you keep it in a savings account for a long time. But then, a savings account is very liquid, and there are costs involved in that.
If you want to keep funds for a longer time, it’s better to switch over to a fixed deposit, which offers a much higher interest rate. Some banks offer a sweep-in facility where money above a certain limit in your savings account will be automatically transferred to a fixed deposit.
Most banks require you to keep a minimum balance in your savings account. However, there are no-frills accounts that enable you keep zero balance in your account.
In recent times, banks have differentiated their savings account offerings so that the savings bank account meaning seems to have undergone a change. There are zero-balance savings accounts that allow you keep your account clean as a whistle. A salary account enables an employer to disburse salaries to employees quickly and efficiently. And there are savings accounts that are meant especially
Benefits of savings account
Enables you to keep your cash safe.
Enables easy payments and receipts.
Idle cash earns interest.
Easy to operate.
Network of ATMs make it easier to withdraw cash.
Online banking enables easy payment of bills and fund transfer.
How to open a savings account
In recent years, banks have simplified the account opening process, so that it can be done quickly and efficiently. In fact, some banks even send their representatives over to your home, so that you can open a savings account without ever visiting the bank branch. Here’s what you need to open a savings bank account:
Proof of identity, like Aadhaar card or PAN card.
Proof of address, like passport, Aadhaar card, driving licence or voter card.
Pasport-size photographs.