Types of Deposit: Demand Deposit and Term Deposit

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Deposit: Demand Deposit and Term Deposit

Demand Deposit: demand deposit and term deposit

The deposit which is payable on demand of the customer i-e known as the demand deposit. demand deposit and term deposit

There are two types of demand deposit:

  1. Saving Account
  2. Current Account

Saving Account (SA):

  1. It is open to developing saving habits among people.
  2. The rate of interest paid by bank 4% per annum up to 1 lakhs which are regulated by RBI & above 1 Lakhs depends on the bank. demand deposit and term deposit
  3. Example: BMB=4.5%, Yes Bank, Kotak Mahindra Bank=6.5% (approx)
  4. Banks are calculating interest on the daily basis from April 2010.
  5. The minimum interest rate is determined by RBI but regulated by respective banks.

Current Account (CA):

  1. It is open for business purpose activity.
  2. Banks are not paying any interest in current Account.
  3. Overdraft Facility is provided to current account holders.
  4. Current Account is regulated by RBI
  5. PAN card is necessary and this account is open with minimum 10000 balance.

Difference between RTGS and NEFT

Definition of Bank and Banking Regulation Act


Term Deposit:

The deposit which is deposited for a particular term /time/period is called Time/Term deposit. demand deposit and term deposit

There are two types of term deposit:

  1. Fixed Deposit
  2. Recurring Deposit

Fixed deposit (FD):

  1. If a lump sum (approx) amount is deposited at a time for a particular period is known as the Fixed Deposit.
  2. The interest rate on the Fixed deposit is decided by respective banks only based on market value.
  3. Minimum Tenure: 7 days, Maximum Tenure=10years

Recurring Deposit (RD):

  1. If any particular amount is deposited after every particular interval/Period.
  2. The interest rate on RD decided by respective banks only based on market value. Example: 2000/- Per month for 1 year
  3. Minimum Tenure, Maximum Tenure: 10 years

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