Are you aware that the banking system in India is the biggest in the world? If not, let me tell you that this country has close to 100,000 banks operating across the country.
And this isn’t strange or wrong, considering the vast expanse of India and the diverse banking needs of its populace.
Therefore, with such a large number of nationalized and private banks in India, it’s but natural that they would offer different types of bank accounts and their features for the customers.
In this article, I will write about the top six types of bank accounts in India that are very common. But firstly, I will write a bit about the different types of banks in India.
Different Types of Banks in India
You might be surprised that India has nearly 100,000 banks or the largest number in the world. So, here’re the different types of banks, by numbers.
These figures come from the European statistics portal, Statista.
- Rural Cooperative Banks (RCBs): 97,006 banks
- Urban Cooperative Banks: 1,531 banks
- Regional Rural Banks (RRBs): 43 banks
- Foreign Banks in India: 44 Banks
- Public Sector Banks (Nationalized Banks): 12 Banks
- Private Sector Banks: 21 Banks
- Small Finance Banks: 11 Banks
- Payment Banks: 4 Banks
- Postal Banks: 2 Banks
As a matter of fact, the number of foreign banks, Regional Rural Banks (RRBs), Small Finance Banks (SFBs) and Payments Banks are increasing rapidly, as the Indian government and the apex bank- Reserve Bank of India, tries to make banking facilities and services available to Indians living in even the remotest corners of this country.
24 Different Types of Bank Accounts in India
As I mention earlier, with so many banks in the country, there are different types of bank accounts available to people.
In this article, I will list the top 24 types of bank accounts that are most common in India.
1. Savings Bank Account
According to the latest figures, about 90 percent of all Indians have at least one Savings Bank account.
This is a direct impact of the Pradhan Mantri Dhan Jan Yojana (PMJDY) launched by the Indian government in 2014.
Consequently, India is also the country with the highest number of Savings Bank accounts in the world.
There’re different types of Savings Bank accounts. They attract interest between 2.5 percent to 7 percent per annum, depending on the bank.
However, some banks charge an Account Maintaining Fee.
2. Zero Balance Accounts
Payments Banks and nationalized banks allow people to open Zero Balance accounts. Such accounts have limited functionality.
Meaning, you can deposit only a small amount of money in these banks. Banks don’t provide chequebooks for such accounts.
However, you can get a debit card for use within India. All accounts opened under the PMJDY scheme are Zero Balance Savings Bank accounts.
They require minimal Know Your Customer (KYC) formalities.
The best banks for Zero Balance Accounts are HDFC, SBI, AXIS, Indusind, IDFC, RBL, Standard Chartered, Kotak Mahindra.
3. Digital Accounts
Digital accounts are most common nowadays. They’re mainly available from Payments Banks such as Paytm Payments Bank, NSDL Payments Bank, Airtel Payments Bank, and others.
SFBs such as Fincare Small Finance Bank, Equitas Small Finance Bank, AU Small Finance Banks, among others, also offer digital bank accounts.
Here, Know Your Customer (KYC) formalities are done online. You can get a chequebook and debit card from some SFBs for such digital accounts.
4. Salary Transfer Accounts
If your employer is banking with a specific bank, they might ask you to open a Salary Transfer Savings Bank account.
There’re two options here: one to open a Salary Transfer SB account with zero balance or with a minimum balance.
These accounts can be held at foreign banks, cooperative banks, private sector banks, and nationalized banks. You can get full service including chequebook and debit card for Salary Transfer SB Accounts.
5. Regular Savings Bank Account
A Regular Savings Bank account can be opened by any Indian citizen. However, you’ll have to complete full KYC procedures to get a Regular Savings Bank account.
To open one, you’ll have to maintain a minimum deposit as stipulated by the bank. In some cases, it can be as low as Rs.500 to Rs.1,000 with cooperative banks, nationalized banks, RRBs and RCBs.
However, private banks demand a minimum balance of Rs.5,000 to Rs.10,000 to maintain the account while foreign banks have a whopping Rs.100,000 minimum balance to open one.
6. Premium Savings Bank Account
Anyone can open a Premium Savings Bank account to maintain a minimum balance of Rs.100,000 for urban and Rs.50,000 for rural areas.
A Premium SB account has a lot of benefits such as personalized banker to assist with formalities, zero waiting time, priority banking, and in some cases, home delivery of services such as cash and check deposit.
You get premium branded debit cards and chequebooks as well as lots of freebies from the bank.
Such accounts are available from Urban Cooperative Banks, nationalized banks, and private sector banks.
7. Pigmy Savings Bank Account
Pigmy Savings Bank Accounts are available from RCBs and RRBs in rural areas. Here, a representative from the bank will visit your home or store daily.
You can deposit a small amount such as Rs.10 or Rs.20 daily. They will give you an electronic receipt of the cash deposit immediately.
A Pigmy Savings Bank Account is offered to help rural folk save some money in small amounts to meet any emergencies or build up savings.
8. Children’s Accounts/ Minor’s Accounts
A Children’s Account or Minor’s Account is a facility available from nationalized banks and private banks.
They allow children below the age of 18 years to open a bank account on their own, as long as they hold an Aadhar card and some basic proof of identity.
Children’s Accounts are to help kids inculcate savings habits and learn banking procedures. Some banks allow parents to be joint holders with their kids for Children’s Accounts.
The child gets a debit card for the account but no chequebook.
9. NRE/ NRI/ NRO/ FCNR Accounts
Nationalized, private sector, and cooperative as well as foreign banks in India offer Non-Resident Indian (NRI), Non-Resident Ordinary and Foreign Currency Non-Repatriable accounts to NRIs and Overseas Citizens of India.
In such accounts, the money is deposited in foreign currency by the holder. The NRO account allows the account holder to withdraw the money in foreign currency while the NRI and FCNR accounts allow you to withdraw cash in Indian Rupees only.
You require a resident permit of a foreign country or an OCI Card to hold such accounts. In Non-Resident External accounts too you can take your money in foreign currency,
10. Current Accounts
Current Accounts are held by businesspersons. All banks in India, except Payments Banks accept Current Accounts.
These are separate from Savings Bank accounts since the turnover of business transactions is higher, because of the business. Opening a Current Account requires full KYC.
In addition, you’ll also require documents to prove that you own the company such as the Company Registration Certificate from a relevant ministry and Goods and Service Tax registration in some cases.
There’re three distinct types of Current Accounts. Current accounts don’t fetch any interest.
11. Zero Balance Current Account
Zero Balance Current Accounts are available from nationalized banks, cooperative banks, and some RRBs and RCBs.
Here you don’t have to maintain a fixed minimum balance. Instead, you’ve to have a certain number of minimum transactions per year to hold the account. Failing to do so can attract service charges.
12. Current Account with Overdraft
Businesses often require more money than they hold in their bank accounts at any specific time. Hence, some banks allow you to open a Current Account with an Overdraft facility.
This means, the bank will honor your check or you can withdraw cash, even if there are insufficient funds in your Current Account.
The bank will adjust the overdraft amount the moment some money is credited. But you can get more overdraft over this amount. Banks charge a fee for overdrafts.
13. Current Account with Shareholding
Some cooperative banks allot a small number of their shares when you open a Current Account with them.
Here, you will have to deposit and maintain a minimum balance, which can range between Rs.10,000 and Rs.500,000.
The higher your minimum deposit, the greater your shareholding at the bank. These banks don’t pay interest.
Instead, they offer bonus shares and dividends to you as their shareholder. These shares cannot be traded on the stock markets.
14. Fixed Deposits
Fixed Deposits are the most popular form of saving large amounts of money in India.
Typically, middle-income group people patronize Fixed Deposits or FDs because they’re safe investments. The highest fixed deposit is a fixed income of 6.50 percent.
The rate of interest depends upon the tenure of the FD, age of the citizen, and bank where you hold it.
Senior citizens and women, especially senior women get 0.5 percent more interest. Here’re the different types of Fixed Deposit accounts in India.
15. Ordinary Fixed Deposit
You can open an FD in India with as little as Rs.1,000. The tenure can range anything from 90 days to 120 months or even more.
Banks pay a cumulative interest of 5.5 percent to 7.5 percent on Fixed Deposits, depending upon the age and gender of the account holder.
Premature withdrawals or part withdrawals are possible, but you can lose interest in such types of deposits.
The interest from FDs is taxable if it is more than Rs.50,000 per year. Any nationalized, cooperative, private bank, RRBs, foreign banks, RCBs and Payments Bank will accept an FD account from you.
16. Cumulative Deposits/ Time Deposits
Cumulative Deposits or Time Deposits are when you commit to holding a fixed amount of money with the bank for a stipulated number of years.
And opt for the auto-renew feature. The bank calculates interest at a flat 5.5 percent compounding rate. This interest is paid every half-yearly to your Cumulative Deposit account.
Premature withdrawals are permitted and you can also do part withdrawals. However, such withdrawals affect your interest. You can start a CD/ TD savings account as low as Rs.1,000.
17. Post Office Certificates
India Post offers three types of Fixed Deposit plans. One is the ordinary FD like the one that I mentioned above.
Then we have two unique FDs: the National Savings Certificate and the Kisan Vikas Patra. You can buy these only from a post office or authorized outlet of India Post.
The National Savings Certificate (NSC) has a tenure of 60 months and attracts compounded interest at the rate of 6.8 percent.
You can withdraw full or part of the money prematurely, if necessary. You can start an NSC account as low as Rs.100.
The other is Kisan Vikas Patra, where you can invest as low as Rs.100. It attracts an interest of 6.9 percent, which is compounded annually.
Your money doubles in 10 years and four months. The certificate can be pledged to banks and other financial institutions to avail of loans, if necessary.
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18. National Monthly Income Account
The National Monthly Income Account is a kind of Fixed Deposit account available from India Post. You can open this account with Rs.1,000 and in multiples of Rs.100.
In return, India Post will pay you a monthly income. It attracts a compounded interest of 6.6 percent and the amount is paid to the account holder monthly.
You can deposit up to Rs.450,000 in the NMIA plan to get monthly income. This is a very popular scheme with senior citizens that don’t have pensions or want to augment their pension with extra income.
You can withdraw the invested amount after a period of 12 months. However, you lose interest.
19. Recurring Deposit
The fourth most common account in India is the Recurring Deposit. If you wish to get into the habit of forced savings, this is the best kind of account you can hold.
Any nationalized bank, private, cooperative, RRBs, RCBs and India Post banks will allow you to open a Recurring Deposit account.
You can open a Recurring Deposit account with as little as Rs.100. You have to deposit the amount every month in your account.
Recurring Deposit accounts generally attract an interest of 5.5 percent compounded per annum. Premature withdrawals are permitted in these kinds of bank accounts.
20. 3-in-1 Account
A 3-in-1 account is yet another common type of bank account in India.
Currently, it’s available from IndusInd Bank IDFC Bank, ICICI Bank, HDFC Bank, Kotak Mahindra Bank and State Bank of India to name a few.
A 3-in-1 account includes a Savings Bank account with a Demat account and a Trading account.
These accounts are ideal for people that wish to trade in stocks and make money or invest in stocks, commodities, currencies, debentures, Exchange Traded Funds (ETFs) and Mutual Funds as an investment.
The Savings Bank account in such cases is linked with your Demat and Trading accounts. When you wish to buy stocks, the money will be automatically withdrawn from your Savings Account.
You can buy stocks or sell them through the Trading account. And your investments will be held in the Demat account.
Generally, 3-in-1 accounts can be opened with zero balance. However, they attract an opening fee for the Demat and Trading accounts.
And you would also have to pay annual Account Maintenance Charges to hold a 3-in-1 account.
Yet, if you’re into stock trading or investing in the stocks and commodities market, such a 3-in-1 account is ideal.
21. Government-Sponsored Accounts
And lastly, we have a couple of bank accounts for Indian citizens that are sponsored by the Government of India.
That’s because the Indian government pays a higher interest from the national exchequer to your account.
Though these accounts can be held at nationalized, private, India Post and cooperative banks, they are regulated by the Ministry of Finance and Reserve Bank of India.
22. Sukanya Samriddhi Account
The Sukanya Samriddhi Account is a type of Recurring Deposit account that can only be opened in the name of a girl before she attains 10 years of age.
This account can be started with a minimum balance of Rs.250 and equal contributions every month.
The account matures when the girl attains the age of 18 years or completes her Secondary School Certificate exams, whichever is earlier.
Premature withdrawal is allowed in extreme cases and even then, you can take only 50 percent of the available balance. This account can be opened in the name of a girl child only.
The Indian government pays a very high- 7.6 percent compounded interest annually on these accounts.
The concept behind this account is to ensure gender savings equality and to ensure that a girl child has adequate money for higher education or starting their own enterprise.
23. Public Provident Fund
The Public Provident Fund is a Recurring Deposit type of account that’s very popular among Indians. This is also a government-sponsored scheme.
The tenure of a PPF account is 15 years. You can open a PPF account with a minimum monthly contribution of Rs.500 and a maximum contribution of Rs.150,000 during any financial year.
A PPF account attracts 7.1 percent interest paid by the Indian government through the Ministry of Finance. You cannot withdraw the money from a PPF account prematurely.
However, it’s possible to take a loan against your accumulated money after a period of one year.
You can open a PPF account at any nationalized bank, India Post bank, private, cooperative, RRBs and RCBs in India.
This account isn’t offered by foreign banks, Payments Banks and Small Finance Banks.
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24. National Pension Scheme
The National Pension Scheme or NPS is a government-sponsored account that’s a mix between a Recurring Deposit and a Demat account.
You can register for NPS at any of the participating nationalized or private banks. The minimum monthly contribution is Rs.500.
You can open an NPS account for Tier-1, Tier-2 or both. However, for each tier, the minimum you have to deposit monthly is Rs.500.
This account is sponsored by the National Securities Depository Ltd (NSDL). The money you deposit is utilized to buy units of Pension Funds.
Upon attaining the age of 60 years, you will get a monthly pension from NSDL, from your account while your investments are further held in the form of annuities.
Full KYC and Minimal KYC Accounts
Before you go to open any of the above accounts, it’s worth knowing the rules.
Under existing Indian laws, you need to complete Full Know Your Customer (KYC) for opening any bank account.
For 3-in-1 accounts, you also need to complete the Central KYC (CKYC) according to Ministry of Finance and Securities and Exchange Board of India regulations.
Full KYC requires photo-identity proof and proof of address such as passport, driving license or Aadhar card and your Permanent Account Number (PAN).
The same documents are necessary for CKYC too.
If the address on your identity documents is different from your present address, the Reserve Bank of India allows you to open a Full KYC account. All you need to do is sign a self-attested declaration that you’re residing at the present address.
However, some banks flout this regulation and demand other documents that can sometimes be difficult to provide.
In some cases, a bank allows you to open an account with Minimal or Partial KYC. This is generally done by online Payments Banks.
Under Minimal or Partial KYC, you have only to provide your proof of identity and address, which isn’t verified by the bank.
Your annual transactions in such Partial or Minimal KYC accounts shouldn’t exceed Rs.10,000 in any quarter of the financial year.
You can get a debit card for such accounts but no chequebook. At the same time, the bank has the option of whether or not to open a partial or minimal KYC account.
Opening any of the six types of bank accounts in India is possible for citizens of this country and NRIs.
For Overseas Citizens of India that hold a foreign passport but have the OCI, all kinds of accounts are available except the 3-in-1 account.
That’s because India doesn’t permit nationals of foreign countries to invest in stocks and commodities markets and in Mutual Funds.
Nowadays, banks are also offering doorstep delivery of services to senior citizens and persons with disabilities. You can open any of these accounts in India if you’re fully or partially KYC compliant.