What Are The Types Of Accounts Opened In Personal Banking?

Posted by Arjit Chalmela on February 17th, 2020

Banks offer their services to a wide range of customers. They offer loans and provide banking facilities to individuals, businesses, corporates, trusts, Governments, non-residents, etc. To streamline their services, they have different segments which cater to specific requirements of each segment. Some of these segments are personal banking, corporate banking, SME banking, NRI banking etc.

Personal banking is a growing consumer segment for banks. 

To put it simply, personal banking is the service that a bank extends to individuals or to retail customers. This service is highly personal with a lot of interaction between the bank personnel and the customers. There are different accounts that a bank offers to its retail customers as a part of personal banking. 

Following are the accounts available:

Savings account: This is one of the most popular accounts among individual account holders. A savings account is a basic account where people can park their funds and withdraw it when they need. However, the RBI has restricted withdrawals from a savings account to maximum 4 times a month. The funds from this account earn a nominal rate of interest. Banks offer facilities like net banking, mobile banking, debit cum ATM card etc.

Current account: This account provides unrestricted access to the liquidity in the account. This type of personal banking is best suited to businesses and small companies that need extra liquidity. Banks customize services for these accounts and provide cash management services, batch payment etc. Apart from this, current account holders also get other services like net banking, mobile banking etc.

Salary account: A salary bank account is opened by companies for their employees when they join work. This is a zero-balance account which is mainly for crediting monthly salary of the employee. The employee can use the account like a regular savings account.

Zero Balance accounts: These are special accounts offered in personal banking where the savings account does not have any minimum balance requirements. Generally, in case of savings accounts, there is a penalty in case the minimum balance is not met. However, in these accounts, there is no penalty and no minimum balance. It gives these accounts features of a regular savings account.

Fixed deposit account: A fixed deposit account is an account where funds are blocked for a period and they earn interest on it during the lock in period. It is possible to open a fixed deposit online through net banking and mobile banking. The tenure for fixed deposits is flexible which means you can open it for the time you do not need the funds and earn a higher rate of interest.

Recurring deposit account: A recurring deposit in personal banking is an account where a fixed instalment amount is invested with the bank for a fixed period. The instalments are debited from the savings account on a fixed date every month. To put it simply, a recurring deposit account is like multiple small fixed deposits which all mature on the same day.

Government scheme accounts: These include accounts for Government small savings schemes like Public Provident Fund, Sukanya Samriddhi Account, etc. These accounts collect funds from the people and invest them in Government schemes. The interest on the schemes is collected and credited into this account. These accounts are backed by Government guarantee which means the default risk is negligible.