What are banks?

A bank is a financial institution that collects cash from the public and does the work of credit creation. They are licensed to receive cash deposits. There are two types of banks:

  1. Commercial Banks
  2. Investment Banks

What are different types of banks in India?

Nationalized banks

Private Banks

Foreign Banks

Regional Rural Banks

Co-operative Banks

Industrial Banks

What are the types of bank accounts?

There are mainly four types of bank accounts namely:

  1. Current Account: it is mainly for business persons, firms, public enterprises and companies and is not used for savings or investment purpose.
  2. Savings Account: It is meant for saving purposes and can be opened by individuals either single or jointly. The advantage of Savings Account is that it pays interest on savings.
  3. Recurring Deposit Account: If someone wants to save a certain amount of money regularly for a certain time period and want to earn higher interest then Recurring Deposit Account or RD account is a good option.
  4. Fixed Deposit Account: Also known as FD Account it can be used to save a particular amount of money for a certain time period. It is one time deposit and cannot be withdrawn before maturity.

What are the different ways of operating a Bank Account?

You can operate your bank account in any of the following ways:

  1. Internet Banking
  2. Mobile Banking
  3. Branch Banking or Over the counter services
  4. ATM (Automated Teller Machine)

What is the difference between Saving Account and Current Account?

A Saving Account is deposit account where one can get nominal interest on deposited amount in the account. Saving account also allowed limited transaction limits.

A Current Account is considered as business account with unlimited transactions limit but no interest is paid on deposited amount.

What are the things to be taken care of before opening a bank account?

If you want to open a savings account you should check the interest rate on deposit and its consistency.

Determine the amount of money you want to put into your account.

Check for the various debit card options and the online features given by your bank.

Also check if they are charging any fees for the additional services and compare them with other banks to choose the right bank for you.

What is a cheque?

A Cheque is used to pay money in and out from your account. It is a written document which orders a bank to pay a certain amount of money mentioned on it from one person’s account to the other whose name is written on the cheque.

What is a crossed cheque?

A crossed cheque is the one which is crossed with two parallel lines. A crossed cheque means that it will be deposited directly into a bank account and cannot be cashed instantly by a bank or a credit institution.

What is account payee cheque?

An account payee cheque is a highly secured type of payment method. The amount from such a cheque can be deposited only in the account of payee and cannot be further endorsed.

What is post-dated cheque?

It is a cheque which is written by the drawer for a future date.

What is the difference between cheque and demand draft?

Though both a ‘cheque’ and a ‘demand draft’ are a way of transferring money, a ‘cheque’ is issued by an individual who holds a bank account whereas a ‘demand draft’ is issued by the bank on request and is a chargeable service.

What is repo rate?

It is the rate at which Reserve Bank of India (or the Central Bank of a country) lends money to the commercial banks if they are facing shortage of funds.

What is reverse repo rate?

Reverse Repo Rate is the rate at which Reserve Bank of India (or Central Bank of a country) borrows money from commercial banks operating in the country.

What is online banking?

Online banking also known as internet banking, or virtual banking is when you can conduct a number of banking transaction through the bank’s or financial institution’s website. Different forms of online banking include NEFT, RTGC, ECS, and IMPS.

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