1 Answers
The Bank accepts two types of deposits from the people.
(i) Demand Deposits:
Demand Deposits are deposits, where money is repaid by the bank on the demand made by the depositors or customers of the bank.
Such deposit accounts are:
(a) Savings Deposits:
As the name indicate this account is opened and operated by that person who have regular and fixed income e.g. salary. In order to ‘save’ something out of current income, this account is opened.
Features of this account are:
- It is mainly for saving purposes.
- Money can be withdrawn on demand.
- Minimum balance must be maintained.
(b) Current Deposits:
This account is opened by the businessman, firm, company, etc. for business purposes. There is no limit on the number of withdrawals. Generally, interest is not payable on this account. Overdraft facilities are also allowed to these depositors.
(ii) Time Deposits:
The deposits which are not repayable on demand are called ‘Time Deposits’. These deposits are payable after a specific period of time.
- Fixed Deposits: In this deposit account, a certain sum is kept deposited for a fixed period. A higher rate of interest is paid on Fixed Deposit.
- Recurring Deposits: In this deposit account, the customer deposit’s fixed amount on regular basis for a specific period. The money is deposited periodically. The rate of interest is more than Saving Deposits.