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Bank Deposit Schemes

Bank deposits are preferred more for their liquidity and safety than for the returns thereon. Various banking and other facilities that one gets by opening a bank account viz. ATM cards, ATM-cum-Debit cards, Credit Cards, On-line / Internet banking, collection / realization of cheques and other instruments, safe deposit lockers, better customer service etc. are also a major reason in favour of bank deposits vis-a-vis other options.

The deposit accounts offered by banks fall broadly under following categories :

Bank Deposit Schemes for Resident Indians

Following deposit accounts are offered by banks to Resident Indians:

• Savings Bank Accounts: These accounts are opened for savings, liquidity and safety of funds and convenience in making day to day expenses and also earning some interest income. These accounts inculcate the habit of thrift in account holders. View salient features of Savings Bank accounts.
• Current Accounts: These accounts are opened for liquidity and safety of funds and for meeting day to day expenses. Current accounts are opened and maintained primarily by business and commercial organizations. No income is earned on these deposits. Individuals usually open these accounts for availing overdraft facility as overdraft facility is not available in Savings Bank accounts. View salient features of Current Accounts.
• Recurring Deposit Accounts: These accounts are opened for saving purpose only. Some fixed amount is deposited at monthly intervals for a pre-fixed term. These accounts generally earn higher interest than Savings Bank Accounts. View salient features of Recurring Deposit accounts in banks.
• Fixed Deposit or Term Deposit Accounts: These accounts are opened for investing funds for fixed terms to earn higher interests. Usually deposit for a longer period of time earns higher Interest Rate. The account holders have option of getting periodic payment of interest at monthly/quarterly intervals or re-investing the interest to be paid on maturity with the principal. View salient features of Term / Fixed Deposit Accounts in banks.
• Special Bank Term Deposit Scheme - Bank Deposit Scheme under section 80C: This is the only Tax Saving Scheme available with banks. The accounts opened under this scheme are eligible for relief under Section 80C of the Income Tax, Act. View salient features of Bank Deposit Scheme for tax saving.

Bank Deposit Schemes for Non-Resident Indians

Following deposit accounts are offered by banks to Non Resident Indians:

• Non-Resident External (NRE) Accounts: These Accounts can be opened by Non Resident Indians individually or jointly with other Non Resident Indian(s). The accounts can be opened in Savings Bank, Current Account, Term/Fixed Deposit with monthly/quarterly interest payment or Term/Fixed Deposit with interest reinvestment types. The account holders can grant Power of Attorney to Resident Indians to operate upon their Savings Bank or Current Accounts. The accounts are maintained in Indian Rupees. View salient features of NRE Accounts
• Foreign Currency Non Resident (FCNR) Accounts: These Accounts can be opened by Non Resident Indians individually or jointly with other Non Resident Indian(s). The accounts can be opened as Term/Fixed Deposit with the option of monthly/quarterly Interest payment or of re-investing the interest for payment on maturity with the principal. The accounts are maintained in foreign currencies viz. US Dollars, Euros, Sterling Pounds, Canadian Dollars, Australian Dollars and Japanese Yen. View salient features of FCNR accounts.
• Non-Resident Ordinary (NRO) Accounts: These accounts can be opened by Non Resident Indians individually or jointly with other Non Resident or Resident Indian(s). These accounts can also be opened by Resident Indians by foreign inward remittance. The accounts are maintained in Indian Rupees. View salient features of NRO Accounts.