Banking allows an entity to carry out basic financial transactions everyday such as transfer of funds, payments, depositing savings and other such activities. However, you need to have a bank account to avail these services.
What is a bank account?
A financial account maintained by a bank for a customer is said to be a bank account. It represents the funds entrusted by a customer to the financial institution and the customers can make withdrawals from it. Within a given period of time, the financial transactions which occur on a bank account are reported to the customer on a bank statement and the balance of the accounts is the financial position of the customer with the institution at any point in time.
Types of Bank Accounts
- Current Account: Current Account is a bank account that allows one to access a range of banking services like receiving money, paying bills, and setting up direct debits and standing orders to make regular payments. It is an important indicator of an economy’s health.
- Savings Account: Savings Account is an interest-bearing deposit account held at a financial institution that provides a modest interest rate to the account holder. The bank may also charge a fee, if the customer does not maintain a certain average monthly balance in the account.
- Recurring Deposit Account: Recurring Deposit is a kind of term deposit that helps people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits by banks in India.
- Fixed Deposit Account: Fixed Deposit Account, also known as FD, is an account maintained by the banks or non-bank financial companies (NBFCs) providing investors with a higher rate of interest than a regular savings account, until the time it matures.
How to open a bank account?
- Make sure one is eligible to open an account
- If one is under 18, some banks might require their parents’ sign on some forms when one applies for the minor account.
- One needs to have valid identification and must be willing to share basic information about them.
- One should have the minimum amount of money for opening an account. The amount for opening an account varies on the bank and the type of account one chooses to open.
- Choose the bank that is best for the customer
- All banks are not the same. One should contact the banks in their local areas to discuss what one would get if he/she opened a basic account.
- Pick the type of account
- If someone is there to open an account for the first time, it is usually a regular checking or savings account. One can choose the type of account they want to open according to their need.
- Visit the selected bank and ask to open an account.
- One who is opening an account for the first time, usually it is best to open the account in person.
- Ask important questions before finalizing the account
- unt that one does not understand.
- Supply the necessary information to create the account
- One has to prove that they are the same person they are saying to be by providing valid government issued ID with their photo on it.
- One has to give their proof of address by providing a phone bill, driving license or any other official document with their name and address.
- Keep the received account documents securely
- The four-digit PIN number to use their debit card for purchases.
- The bank account number.