TYPES OF DEPOSITS IN INDIA

There are two types of deposits:

1. Demand Deposits

2. Time/Term Deposits

Let's read these in detail gUYsss ......... ! ! ! ! !

1. Demand deposits: The money we keep in our saving accounts is like a medium of exchange and this is called Demand deposits. This is because ownership of this deposit may be transferred from one person to another via cheques or electronic transfers. There is no fixed term to maturity for Demand Deposits as we all PGs already know. These following A/Cs come under demand deposits:

a)Savings Account(explained in earlier post)

b)Current Account(explained in earlier post)

c)CASA Account

2.Time/Term Deposits: If we deposit our money as a FD in the bank it becomes a Time Deposit on which NO cheque can be drawn. They are paid on maturity at a particular time. 

Now Time/Term Deposits are of three kinds: 

a)Fixed deposits: A fixed rate of interest is paid at fixed, regular intervals 

b)Re-investment deposits: Interest is compounded quarterly and paid on maturity, along with the principal amount of the deposit. In the Flexi Deposits amount in savings deposit accounts beyond a fixed limit is automatically converted into term-deposits. 

c)Recurring deposits: Fixed amount is deposited at regular intervals for a fixed term and the repayment of principal and accumulated interest is made at the end of the term. These deposits are usually targeted at persons who are salaried or receive other regular income. A Recurring Deposit can usually be opened for any period from 6 months to 120 months.