Banks are the financial Institutions. Bank accounts serve between the customers and the associations. There are many types of accounts such as Saving, Current, Recurring and fixed.
The account holder can deposit money and withdraw it in every month but he cannot access his money with checks, and the withdrawals made by him are limited to the numbers. There is no minimum balance is required to maintain saving account. Low interest rate is paid by the institution.
In this the deposits are made for the long duration and the terms defined by the institutions, these deposits are fixed, by the time it get matured and if during an emergency you need to break the fixed term deposits then you have to pay some penalty on that about 1% of the deposit money and some of the institutions don’t even charge the penalties. Every bank has their different interest rates policies. Financial institutions have also introduced variable interest rate deposits i.e. as the market rates goes up the interest rate will also rise and vice versa.
This is mainly for the businessman whose purpose is to make numerous transactions on daily basis. It does not provide any interests on current account but charges for services provided by them. This is for day to day transactions.
It is for the people who have regular income. It is a kind of fixed deposit account as you have to make monthly installments and the minimum amount is 500, if amount is taken before the maturity period than no interest is paid.
Therefore the rate of interest varies from one institution to another. Earlier only the private institutions provides high rate of interests but today the competition is increasing rapidly so many other small banks are stepping ahead to provide higher interests rates and to attract more and more people.
A bank account is where a financial institution provides you an umbrella so that when it begins to rain you can cover yourself.