TYPES OF DEPOSIT ACCOUNT FIXED DEPOSIT SAVING DEPOSIT

TYPES OF DEPOSIT ACCOUNT

FIXED DEPOSIT SAVING DEPOSIT RECURRING DEPOSIT CURRENT ACCOUNT DEPOSIT

FIXED DEPOSIT ACCOUNT Deposit with the bank is for fixed period Principal is payable on expiry of term Also called TERM DEPOSIT. Deposit Period : 3 -6 years. High rate of interest

RATE OF INTEREST AND PERIOD OF DEPOSIT After oct 1997 banks were permitted to charge their own interest rate. Interest rate paid according to schedule of act Varies from bank to bank Depends on amount deposited Minimum period of deposit was reduced to 7 days from April 1997. Maximum period is 5 -10 years.

PAYMENT OF INTEREST Interest may be paid quarterly or half yearly Amount is deposited to the depositor's savings account. No cheques are permitted for withdrawal.

FEATURES OF FIXED DEPOSIT RECIEPT Not a negotiable instrument Cannot be transferred No cheques can be drawn Amount can be claimed if the receipt is lost

SAVING DEPOSIT ACCOUNT Meant for personal savings Interest rate is less than Fixed Deposit Until 24/10/2011 interest rate was 4%. No of withdrawal is 50 for 6 months. Minimum withdrawal : cheque : Rs 5, form Rs 1 Minimum balance Rs 500 -Rs 1000. Interest calculated quarterly. Calculated between 10 th and 31 st of every month Interest is credited twice in a year.

RECURRING DEPOSIT Also known as cumulative deposit account. Fixed amount of money is deposited every month. Monthly installments must be paid before last working day of the month. Maturity period = 6 -120 months. If Depositor closes the A/c before maturity period the bank: Ø Pay no interest –Less than 3 Months. Ø 15%- 6 months Ø 4%- 12 months

CURRENT ACCOUNT DEPOSIT Business Purpose No restriction for number/amount of withdrawal No interest given PREVILIGES: 3 rd party cheques cab be deposited for collection. Overdraft Facility. Loans and Advances are given.