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What Are The Types Of Deposits Available In India Today?
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Banks in India, offer quite a few services to their customers, ranging from money savings options to loans as well as investments. One can open a savings account in a bank to save up some cash, or opt for any type of loan be it a home loan or even a car loan. Investments through banks may be done via banks deposits, bonds or mutual funds etc.
When it comes to the various types of deposits that are available in India today, the first 2 types that one may be aware of are fixed deposits and recurring deposits. Fixed and recurring deposits are the most common types of deposits.
Bank deposit has been divided into 3 specific types. They are-
1. Time deposit
2. Demand deposit
3. CASA deposits
These 2 deposits have been further categorized into other forms of bank deposit.
In case of time deposits, the money is deposited with the bank for a certain period of time. An individual cannot withdraw the amount before the tenure is over. If a depositor does withdraw cash from the bank deposit account before maturity a penalty fee is charged. Time deposits are thus also known as term deposits. The time deposit that is most commonly opted for is fixed deposit. Other time deposits include re-investment deposits and recurring deposits.
Those opting for time deposits can save as well as enjoy returns in the form of interest. The interest rate offered on time deposits varies from one bank to another. Longer the term of the deposit, higher will be the rate of interest that the bank will offer.
In case of demand deposits, the money deposited with the bank can be withdrawn anytime. The bank does not need to be given a notice in advance. The funds can be withdrawn via a cheque, ATM or from the bank directly.
Those who opt for a demand deposit may or may not receive interest from the bank. Even if interest is given, the rate is generally quite low.
There are 2 types of demand deposits, namely savings account and current account.
A savings account and current account deposit together is known as a CASA deposit. These deposits pay low interest and are quite beneficial for banks. Banks want to increases the number of CASA deposits they have, thus they offer services to companies like salary accounts etc.
Other types of deposits in the country also include NRO, NE (E) RA as well as FCNA (A) accounts. One can also avail insurance for deposits in India.
Author Bio:- Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about the EMI calculator and why is it important to calculate the EMI. Through her work, she provides valuable information on the types of deposits in the country.
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