Introduction – Bank is a German word, which means to collect. A bank may be defined as an institution, which deals in money and instrument of credits. It accepts money from public to lend it to needy.

The relationship between bank and a customer begins when the customer opens an account in the bank. The banks allow the facility of opening the different types of accounts to suit the requirements or needs of several types of customers.

Different types of bank accounts in India – There are different types of bank accounts in India, which are discussed below-

1. Current account – It is also called as demand deposit account. A businessman or a company owner may open a current account in the bank by making an initial deposit of Rs 3000. Thete is no upper limit to the amount, which can be deposited in this account. There is no restriction regarding the number of withdrawals and the amount of withdrawals, which are provided sufficient balance in the account. For this reason, it is also called as a running and active account. A customer may be permitted to withdraw more than what he has deposited in this account. Current accounts suit the needs or requirements of industrial, commercial, and many other organizations. There is no interest is paid by banks on these accounts and no limit of withdrawals in this type of account.
2. Saving account – It is meant for individuals and snall businesses, which save a little amount of their current income to safeguard their future and to earn some interest on their savings. A saving account can be opened with a snall amount of Rs 500. A minimum of Rs 500 is to be maintained in this account. Saving account holders or customers are also allowed to deposit drafts, cheques, dividend, and many more. In this facility, it is necessary that account holder must be introduced by an individual having a current of savings in the same bank. Bank allows interests on deposits, which can be maintained in savings as per the rates prescribed by the Reserve Bank of India.
3. Recurring deposit account – In this type of bank account, the depositor is required to deposit a fixed amount if money every month for a specific time. Each installment may vary from Rs 10 to Rs 500 or more per month and the total period of account may vary from 12 months to 10 years. After the completion of the particular or specified time, the customer will get back all his deposits along with the cumulative interest accrued on them.
4. Fixed deposit account – The word fixed deposit means deposit repayable only after the expiry of a specified time or period. Since it is repayable only after a fixed period, which is to be determined at the time of opening of the account so it is also called time deposit. Fixed deposits are the most suitable form of raising resources for a commercial bank. It may employ these funds more profitably by lending at higher rates of interest and for relatively longer periods. For this reason, banks offers higher rates of interest on such deposits.  The longer the period of deposits, the higher is the rate of interest. The rate of interest on fixed deposits is higher than allowed on saving account deposits. The longer the period of deposit, the higher is the rate of interest allowed by the bank.