Business Services-2 — OCM STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceOCMBusiness Services-25 Marks
Question
Explain the types of Bank Account.
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Answer
Introduction :
The main function of bank is to collect unutilized money as deposit from public.
Depositor in bank has to open account in the bank while opening the account in the bank as per rule for $KYC$ (Know Your Customer), identity card with photograph and evidence of residence is submitted to the bank.
Then only the bank opens account as according to the requirement of the applicant.
Two Types of Bank Accounts : There are four main types of hank accounts.
Savings Account :
This account is opened in single name or joint names.
Interest at fixed rate is paid on the amount deposited in this account.
Interest is paid on the days for which the amount is deposited in large account.
Account holder can deposit amount in this account through cash, cheque and draft. He can withdraw money through withdrawal slip or cheque.
Minimum balance as decided by bank is been kept in this account number of withdrawal transactions in a month are fixed by bank for this account.
Bank provides facility of cheque book and $ATM$ Card. Account holder can nominate his successor for this account.
The number of middle class families is quite large in our country so banks receive deposits in large number.
Current Account :
Normally businessmen keep this type of account.
This account can be opened in single name of an individual or in m n the name of a business unit.
There is no limit for $N$ debit or credit transactions in this account. or mallty no interestis paid on the amount lying in this account.
Bank charges are recovered from account. Bank provides lending facility to the account holder of this type of account.
Recurring Account :
This type of account is opened for the purpose of saving. Every month fixed amount on fixed date is deposited in this account.
The rate of interest is higher than saving account but lower than fixed deposit account. On maturity of the account, account holder is paid the amount deposited with interest.
Fixed Deposit Account :
In this account amount is deposited for fixed period, that is why it is called fixed deposit account.
Depositor cannot withdraw money before stipulated period fixed between bank and himself.
Compare to recurring and saving account the rate of interest is higher.
Bank gives written promise to pay the deposited amount with interest to the depositor.
Conclusion :
Banks accept deposits through various accounts and pays interest on the amount deposited. Normally the rate of interest of all nationalized banks is the same.
Private banks and Co-operative banks pay little higher to interest.
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