Wednesday, 3 October 2012

Different types of accounts and its features




At is one of the main functions of commercial bank to receive surplus balance the people, firms and other institution in the form of opening different types of bank accounts.

Following are the main kinds of bank account.
1.                 Current account.
2.                 Term deposit.
3.                 Project loss sharing account.
4.                 P and L term deposit o/c.

1.                 Current account:

The current a/c is also called “running account”. Which is continuously in operation. It is used by customer to transfer money or withdraw deposit on demand. The customer can withdraw their current deposits without pervious notice to the bank. The bank has to accept the cheque provider to them within the limits of the account.

Important features:

a)                 Amount:
 This account is opened with the minimum amount of RS 1000/-
b)                Interest:
The interest is not paid on the current account.
c)                 Cheque:
           The customer can withdraw amount through cheques provided by    banks.
d)                Overdraft:
The businessman are allowed overdraft from this amount under prior agreement with the bank.
e)                Charges:
The banker can recover some charge of the balance falls below of fixed minimum balance.
f)                  Notice:
The customer can withdraw money from his account any time without notice.
g)                 Statement:
Statement of account is sent to customer periodically or can be obtained any time on application.

2.                 Fixed deposit account:

This account is suitable for the people who have surplus money and don’t need such funds in the near feature. The surplus money is deposited for a fixed period. The rate of interest is higher than other accounts.

Important features:

a)                 Fixed amount:
A fixed amount is deposited for a fix period.
b)                Withdrawals:
The amount can be withdrawn before maturity after surrounding the amount.
c)                 Profit:
 The amount of profit can be received after sixth month.
d)                Rate:
The rate of profit varies due to variation of time period.
e)                Loan:
The loan facility is available against fixed deposit account.
f)                  Receipt:
A receipt is issued for the amount deposited the receipt is called “fixed deposit receipt (FDR)”.

3.                 Profit and loss sharing account:

The mentioned accounts are opened by the banks. The deposits are invested in non-interest bearing areas of business.

Important features:

a)                 Amount:
This account is opened with a sum of not less than RS.100.
b)                Withdrawals:
The amount can be withdrawn eight (8) times in calendar month.
c)                 Cheque:
The cheques are used for taking money back.
d)                Notice:
A notice of seven days is necessary for withdrawals of money more then certain limit.
e)                Profit:
The rate of profit is declared after the blows of each half year.
f)                  Statement:
The statement of account is supplied to the customer at periodically interval.

1.                 Profit and loss sharing term deposits account:
The PLS term deposit account are opened for a fixed period of time. The time period ranges for six months to five years and over. The people having surplus money can use this facility to earn profit/income.

Important feature:

a)                 Receipt:
The term deposit receipt is issued to the customer. It shows the amount and time period of deposit.
b)                Profit:
The profit is paid after every six months on 30th June and December 31st.
c)                 Cheque:
The PLS, term deposits account is a non-operative account. Therefore cheque is not allowed. The term deposit receipt is issued for withdrawal of full payments.
d)                Further deposits:
The further deposits are accepted in multiply of RS1000. It may be 1000, 2000, ----- etc.
e)                Withdrawals:
The deposits withdrawal before six month will not share in profit.

1 comments:

  1. Account is is used to classify and summaries measurements of business activity an element in accounting system and there are 4 types of Accounts.

    ReplyDelete

 

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