Commercial Banks offer numerous services to their clients and as such different types of accounts are provided keeping in view the requirement of the customer. Not just that satisfy the customer needs very well, it also generate handsome amount of revenue for the commercial bank. As the banks are made up to make money from the money they receive from the public, they have to find new ways up multiplying money to make the income. In pursuit of this, it offers various kinds of bank accounts. Let’s pour light on the features:
Features of Various Kinds of Bank Accounts
1. Fixed Deposit Account
As the name suggest, customers are required to keep their money with the commercial bank for a specified period of time which is set at the time of opening the account. The account holder cannot withdraw funds from this type of account unless specifically allowed. However, if the customer withdraws fund well before the specified period, he or she has to pay the penalty amount. Interest rate on these types of accounts are given at a higher rate to encourage saving habits in the public.
2. Saving Account
This type of account is also encourage customers to save money in order earn interest on their deposit. Usually, this is best account for small amount because account holders can withdraw funds from this account without incurring any penalty. Commercial banks invest the amount collected from these types of accounts on short term investment, so they invest at higher rate and return the money to the customer at a lower interest rate.
3. Home Saving Accounts
This is quite popular amoung housewives because it allows quite low amount of savings deposited into home saving account. Under this arrangement, the account holder is provided with a Saving Box. Te keys are kept with the bank’s operation manager or senior banker. When the small amounts accumulates to a minimum set level, they are put into sav ing accounts to earn interest. Account holders are given back interest at lower rate.
4. School Ranking Saving Accounts
As the name suggests, this type of account is offered to develop the habit of saving in school children. The principal or head master of the school collects deposits from the student on behalf of the bank. Student’s cheques are also submitted with the principal for clearing. The banker’s officer visit the school weekly to collect the deposits and cheques for clearing. Like Home saving account, the deposit collected from students are kept in the saving box. Upon reaching to a minimum level, they are deposited into saving account.
5. Current Accounts
These are the accounts which are popular among public sector organizations and businessmen. This type of account allows multiple deposits and withdraw in a single day. Banks do not pay any interest on the deposit received from the account holder. Though, they do invest the money received from the account holder. Banks also earn various income on issuing cheque books, pay orders and other services.
6. Profit & Loss Saving Account
This is the account type through which account holders are allowed to take share of the profit earned by th bank on the amount of their deposit with the commercial banks. Banks try their utmost to earn the profit on the deposit, so that account holders can also get benefit. However, if bank incur losses on the deposit, same is transferred to the account holder. That is why, it is called Profit & Loss Saving Account.