Different Types of Bank Accounts
What is Current Account?
What is Savings Account?
What is Recurring Deposit Account?
Recurring deposit account or RD account 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 RD account 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.
The period of deposit is minimum six months and maximum ten years. The interest rates vary for different plans based on the amount one saves and the period of time and also on banks. No withdrawals are allowed from the RD account. However, the bank may allow to close the account before the maturity period.
These accounts can be opened in single or joint names. Banks are also providing the Nomination facility to the RD account holders.
What is Fixed Deposit Account?
In Fixed Deposit Account (also known as FD Account), a particular sum of money is deposited in a bank for specific period of time. It’s one time deposit and one time take away (withdraw) account. The money deposited in this account can not be withdrawn before the expiry of period.
However, in case of need, the depositor can ask for closing the fixed deposit prematurely by paying a penalty. The penalty amount varies with banks.
A high interest rate is paid on fixed deposits. The rate of interest paid for fixed deposit vary according to amount, period and also from bank to bank.