10 Different Types Of Bank Accounts In India

Not having a bank account is not imaginable these days. Whether you are a college student or a housewife, a businessman or a salaried individual, having a bank account or even multiple bank accounts per individual is an absolute necessity. Based on the major purpose of the bank account, frequency of transactions, and other things, banks offer multiple types of accounts to their customers. 

Below, we’ll have a look at 10 different types of bank accounts in India ranging from savings accounts to NRI accounts.

10 Types of Bank Accounts in India

Now let’s have a look at the features of all these bank accounts in detail.

1. Savings Account

This is the most common type of account, ideal for everyday banking activities. You can easily deposit and withdraw money, often with a debit card for ATM access and purchases. Savings accounts typically offer online banking for bill payments and transfers. Most banks require a minimum balance to be maintained, and you'll earn a small amount of interest on the balance in your account.

Features:

• Debit card for ATM withdrawals and purchases
• Online banking for bill payments and transfers
• Minimum balance requirement (may vary by bank)
• Low interest rate on account balance

2. Current Account

Primarily used by businesses for frequent deposits and withdrawals of funds. Current accounts offer high transaction limits but don't earn interest on the balance. They often require a higher minimum balance compared to savings accounts and may come with overdraft facilities, allowing you to temporarily withdraw more than what's available in your account (subject to fees and approval).

Features:

• High transaction limits
• No interest earned on the balance
• Higher minimum balance requirement (compared to savings accounts)
• May offer overdraft facilities

3. Salary Account

This is a specialised savings account offered by banks in partnership with companies. Your employer company deposits your salary directly into this account. Salary accounts often come with features similar to regular savings accounts, including a debit card and online banking. Some banks might offer special benefits like salary advances or waivers on minimum balance requirements.

Features:

• Similar features to regular savings accounts (debit card, online banking)
• May offer special benefits like salary advances or waivers on minimum balance requirements

4. Fixed Deposit Account (FD)

A fixed deposit is ideal for parking your money for a predetermined period (e.g., 1 year, 5 years) to earn a higher interest rate compared to a savings account. You lock in your deposit for the chosen term, and early withdrawal may incur penalties.

Features:

• Higher interest rates compared to savings accounts
• Fixed-term deposit (locked in for the chosen period)
• Early withdrawal penalties

5. Recurring Deposit Account (RD)

This account encourages disciplined savings habits by allowing you to deposit a fixed amount regularly (e.g., monthly) over a chosen period. You earn interest on the accumulated amount. While RDs offer more flexibility than FDs with the possibility of premature withdrawal, the interest payout might be lower in such cases.

Features:

• Encourages disciplined saving habits through regular deposits
• Earns interest on the accumulated amount
• More flexible than FD (premature withdrawal allowed, may impact interest)

NRI Accounts (for Non-Resident Indians)

The following accounts cater specifically to Non-Resident Indians (NRIs) managing their finances in India or abroad.

6. Non-Resident Ordinary (NRO) Savings Account

This type of bank account allows NRIs to manage the income they earn in India. You can deposit Indian Rupees (INR) and earn interest on the balance. However, funds cannot be directly transferred abroad and require conversion to another account for repatriation.

7. Non-Resident Ordinary (NRO) Fixed Deposit Account

Similar to regular FDs, NRO FDs allow NRIs to deposit INR for a fixed term at a predetermined interest rate, typically offering more favourable rates compared to NRO savings accounts.

8. Non-Resident External (NRE) Savings Account

This account is for NRIs managing income earned abroad. You can deposit funds in foreign currency and earn interest on the balance, usually in the same foreign currency. NRE accounts offer more flexibility for the renewal of funds abroad.

9. Non-Resident External (NRE) Fixed Deposit Account

NRIs can deposit foreign currency for a fixed term at a predetermined interest rate with NRE FDs. They share features similar to regular NRE savings accounts but with fixed terms and interest rates, often offering higher rates than NRE savings accounts.

10. Foreign Currency Non-Resident (FCNR) Account

FCNR accounts are for NRIs to deposit large sums of foreign currency for a fixed term, typically attracting the highest interest rates among NRI accounts. Deposits are only allowed in major foreign currencies like USD or EUR, and they come with higher minimum deposit requirements compared to other NRI accounts.

Recommended Read: All you need to know about NRE and NRO accounts

Summing Up,

Indian banks offer various accounts to suit different needs, like saving money for everyday use or for a specific goal. This helps people of all ages and backgrounds manage their money better. As more and more people learn about these accounts, it benefits everyone in the country.

Frequently Asked Questions

1. How many types of bank accounts are available in India?

There are many different types of bank accounts in India, including savings, current, fixed deposit, recurring deposit, and special accounts for NRIs (Non-Resident Indians).

2. Can I have 10 bank accounts in India?

Yes, you can have more than 10 bank accounts. There is no official limit on the number of bank accounts an individual can have.

3. Which is the No. 1 bank in India?

HDFC is the current number one bank in India.

4. Can I have 2 salary accounts?

Yes, you can have 2 salary accounts opened in different banks.

5. Can NRIs open a bank account in India?

Yes, NRIs can open specific types of bank accounts in India.

Disclaimer: This page includes information that has been compiled from many sources and is only offered for informational purposes. Since this type of data might change over time, we cannot guarantee that the information supplied or included within it is accurate. It is anticipated that the user would confirm with the relevant source prior to taking any choices or actions.