Types of Banks of Accounts You Can Open
Welcome to the fifth edition of the Finconomist - The Finsnap Newsletter!
We hope you all enjoyed reading the previous editions as much as we did making them! (If you missed any of them, you can always find them at: www.finsnap.org!)
This time, we bring to you something different yet extremely important to know about- the various kinds of bank accounts that you can open!
But before we get started, we want to give you a peek into what Finsnap’s been upto these past couple of months:
So get ready for another ride across the Finsnap Ocean - a plethora of fun personal finance principles, terms as well as digital tips!
Being a Finsnapper implies that you’re already considering ways to make your money grow. However, not all of us have bank accounts yet or we’re not completely aware of the options out there. So here’s your starter kit.
Savings A/c:
Account in which you can make unlimited deposits and a restricted number of withdrawals.
The interest rate paid is modest ( on amount left in a/c at the end of every month)
Safe and reliable. Used for short term needs as money is available on demand.
Fixed deposit A/c:
Account in which a fixed sum of money is deposited at once for a fixed time period.
Higher interest rate than savings account.
Safe and reliable. Used to keep aside money that is not needed for a long time.
Recurring deposit A/c:
Account in which a fixed amount of money is deposited every month for a fixed time period (instalments).
Higher interest rate than savings account.
Safe and reliable. Used when you do not have a sum big enough to invest in a fixed deposit account at once.
Some banks allow you to increase the installment amount upto a certain limit.
Sweep in FD (The Finsnapper Way)
Facility by which an excess amount, over the amount that was agreed to be maintained in the normal savings account, is automatically transferred to a fixed deposit for a year or more.
Aims to make fuller use of the savings of the customer.
Some other types of savings accounts:
Women’s savings A/c :
Special discounts on some bank services, complimentary personal insurance services, higher interest rates and other benefits.
Minor A/c:
An account held jointly by a major(guardian or parent) and a minor. Children above the age of ten are given a debit card and a cheque book to operate the account on their own subject to restrictions placed by the guardian. Once the child turns 18 they can close this account or convert it to a regular savings account.
Pradhan Mantri Jan Dhan Yojna Savings A/c:
A RuPay debit card is issued to holders and maximum 4 withdrawals per month are allowed. No need to maintain a minimum balance or to pay an annual fee. Several insurance benefits are provided to the holder. Aims to make banking affordable for low income groups.
Now that you know the various options that you have, not only are you more aware but you can also go and utilise any of these facilities if you haven't already! You’re now one step closer towards financial mindfulness!! P.S: Feel free to reach out to us if you want to talk about finance in a way that doesn’t put you to sleep. Or drop us a line saying hi! gofinsnapper@gmail.com
Until next time; Adios, Amigo! Team Finsnap