Define the term banking. Wxplain the types of bank accounts.
Dear student,
A bank is a financial institution that accepts deposits from the public and creates credit. Banking refers to business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. Banking also include services like issuance of debit and credit cards, providing safe custody of valuable items, lockers, ATM services and online transfer of funds across the country / world
Various types of bank accounts are:
1) Current Account: It is mainly for business persons, companies, public enterprises etc and are never used for the purpose of investment or savings.These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day. No interest paid on amount held in the account, banks charges certain service charges, on such accounts.
2) Savings Account: It is meant for saving purposes. Any individual either single or jointly can open a savings account. Most of the salaried persons, pensioners and students use Savings Account. The advantage of having Savings Account is Banks pay interest for the savings. The rate of interest ranges between 4% to 6% per annum in India.
3) Recurring deposit account: It is opened by those who want to save certain amount of money regularly for a certain period of time and earn a higher interest rate. In it a fixed amount is deposited every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.
4) Fixed deposit account: In this particular sum of money is deposited in a bank for specific period of time. The money deposited in this account can not be withdrawn before the expiry of period.
Regards
A bank is a financial institution that accepts deposits from the public and creates credit. Banking refers to business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit. Banking also include services like issuance of debit and credit cards, providing safe custody of valuable items, lockers, ATM services and online transfer of funds across the country / world
Various types of bank accounts are:
1) Current Account: It is mainly for business persons, companies, public enterprises etc and are never used for the purpose of investment or savings.These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day. No interest paid on amount held in the account, banks charges certain service charges, on such accounts.
2) Savings Account: It is meant for saving purposes. Any individual either single or jointly can open a savings account. Most of the salaried persons, pensioners and students use Savings Account. The advantage of having Savings Account is Banks pay interest for the savings. The rate of interest ranges between 4% to 6% per annum in India.
3) Recurring deposit account: It is opened by those who want to save certain amount of money regularly for a certain period of time and earn a higher interest rate. In it a fixed amount is deposited every month for a specified period and the total amount is repaid with interest at the end of the particular fixed period.
4) Fixed deposit account: In this particular sum of money is deposited in a bank for specific period of time. The money deposited in this account can not be withdrawn before the expiry of period.
Regards