Task 17 – Getting Thing Done

Types of Bank Accounts

1) Demand Deposits
 Money can be Deposited/withdrawn any time
 Demand Deposits maintain Liquidity in the Economy
There are 2 types in Demand Deposits
a) Savings Account
- This Account is a very common account opened by individuals
- There are few Limitations on number of transactions per day regarding
Deposits/withdrawals
- 3-4 % on average, interest is provided by banks
- BSBDA (Basic Savings Bank Deposits Account)
- BSBDAS (Basic Savings Bank Deposits Account Small scheme), If opened
under scheme

b) Current Account
- Current Account is mainly opened in the name of Company
- No Restrictions/Limitations on Transactions, deposits and withdrawals
- No interest is provided
- Overdraft Facility is available

2) Time/Term Deposits
 In Time/term deposits the money is locked for a fixed period of time
 Interest rate is more compared to Demand deposits
 5-6 % is provided
There are 2 types
c) Recurring Deposits
- The amount is deposited in instalments by the account holder

d) Fixed Deposits accounts

- The Money is deposited one time
- Minimum deposit starts with 10000
- There are short term and long-term fixed deposits
- Senior citizens can get a benefit of additional 0.5% on their fixed deposit
- Interest rate is high is fixed deposits compared to other accounts
 3) Demat Accounts
 This account can be opened in any bank
 To transact on Mutual funds, Bonds, Shares
 Annual charges should be paid

4) NRI accounts

a) NRO (Non-Resident ordinary rupees account) – When an NRI receives income

from India and deposited in Indian bank then NRO account is opened

b) NRE (Non-Resident External Rupee Account) – When NRI deposits money from
other countries to Indian bank accounts then it is a NRE account

c) FCNR (Foreign Currency Non-Resident account) – Due to inconvenience in

converting foreign currency to INR, FCNR account maintains the deposits in
foreign currency and it is available only in Term/Time Deposits (1-5 years)

d) RFC (Resident Foreign Currency account) – If any foreign Individual planning to

settle in India and wants to maintain the account in foreign currency, then the
account is RFC

Bonds types

1) Zero Coupon Bonds

- Purchased at Discount
- No interest is paid
2) Corporate Bonds
- Bonds issued by the Companies
- Issue bonds as the interest payment is low compared to bank loan
interest
3) Municipal Bonds
- Issued by Municipal Corporations/Local Authorities
- For the Construction of Infrastructure
4) Convertible Bonds
- These bonds have dual benefit of bond and share
- After maturity Bond is converted into company share
5) Govt. Bonds
- Also call G-Sec
- Issued by Central/state govt
- For development of the country
 6) Inflation Linked Bonds
- Bonds with Protection against Inflation
- At maturity Inflation plus Interest rate is given
- Issued by Govt
7) Callable Bonds
- The bonds issued by companies can be called back any time before
maturity
- Favourable to the companies
8) Puttable Bonds
- Bonds are allowed to put back to the company before maturity
- Favourable to the Bondholder
9) Tax-free Bonds
- Most of the bonds are taxable if the interest income from the bond is
more than 10000 a year
- But Bonds like Sovereign Gold Bonds, Capital Gain Bonds by NHAI, REC,
IRFC are Tax-free
10) Serial Bonds
- In these bonds’ companies pay the interest and the principal amount in
small instalments to the bondholder to reduce the burden on company on
final payments

Submitted by Gidijala Sai Anil Kumar

Batch: 21WM30 B10