📌Difference between Time Deposit Account, Savings Deposit Account and current account
📌Time deposit account
📌 Current deposit account
📌 Savings deposit account
📌 Differentiate between Time Deposit Account, savings deposit account and current account.
Time deposit Account or Fixed deposit account:– All banks in India offer fixed deposit accounts with a wide range of term savings. A fixed deposit account is also called a time deposit account. Under a fixed deposit account the amount is deposited for a period and it should not be withdrawn before the expiry of the pre – decided period.Fixed deposit account is opened for 7 days to 10 years. The interest rate paid on this account is higher than any other type of account. These are known as FD accounts.Commercial banks offer a higher rate of interest on fixed deposits to entice customers to keep their money for a longer period of time.
Current account: Open account is another name for current account. In this account, money can be deposited and withdrawn from a current account at any time during business hours without notifying the bank.Businessmen prefer to keep their money with the bank instead of keeping it in their cash box where it can be lost or stolen, as they can deposit or withdraw money from an existing account whenever they want.Current account holders can get an overdraft facility from the bank. The purpose of a current account is to offer businessmen with deposit and withdrawal facilities, relieving them of the responsibility of handling cash and the danger that comes with it.The customer has complete control over this account. Customers can withdraw funds from their accounts by cheque at any time during the bank’s business hours on any working day. There are no limitations on the amount of withdrawals that can be made. Banks usually do not pay interest on current deposit accounts.
Saving Deposit Account: This account is intended for those in the middle and lower income groups. This sort of account allows the customer to deposit his small savings. Any person with a certain minimum deposit can open a savings bank deposit account. The key feature of this account is that deposits can be made as many times as you like in a week.
However, withdrawals are limited to once or twice every week. To prevent the tendency of making frequent withdrawals, banks set several limits on withdrawals. Most banks allow 50 withdrawals in a six-month period. When compared to fixed deposit accounts, the rate of interest paid on saving deposits account is quite low.Interest is paid on the minimum balance to the credit of an account from the tenth to the last day of each month. Savings bank account holders receive a passbook. When a depositor wants to withdraw money, he usually has to present his passbook together with a withdrawal request.Banks are now allowing saving bank customers who maintain a minimum balance in their accounts to use the cheque function. The holder of a savings account is expected to keep a minimum amount in the account at all times. The bank will deduct a nominal amount if the balance falls below the minimum balance amount.
Difference between time deposit account, savings deposit account and current deposit account.
Time deposit account:The goal of a fixed deposit account is to make money through earning interest.
Savings deposit account:The primary goal of a savings account is to encourage people to save.
Current deposit account:The primary goal of a current deposit account is to help a business.
2.Period of Deposit :
Time deposit account: Deposits are made for a specific amount of time and for a specific amount of money.
Savings deposit account:Deposits in a savings deposit account are not subject to a time limit.
Current deposit account:Deposits do not have a set period because it is an open and continuing account.
3.Frequency of deposits :
Time deposit account:The deposit is made only once.
Savings deposit account:Deposits can be made in enormous quantities.
Current deposit account:There are no restrictions on depository funds.
4.Restriction on withdrawals:
Time deposit account: At maturity, the deposit amount can be withdrawn.
Savings deposit account:Banks allow 50 withdrawals every six months.
Current deposit account:Withdrawals are not restricted in any way.
Time deposit account: A higher rate of interest is permissible.
Savings deposit account:In comparison to fixed deposits, a lower rate of interest is offered.
Current deposit account: No interest is paid.
Cheque facility: No cheque facility is provided.
Saving deposits account: cheque facility is provided
Current deposit account: Cheques are often accepted.