Explain the different types of accounts in which a bank may receive deposits. Also explain the different types of schemes through which a bank may receive time deposits.

Types of Accounts in which a Bank may receive Deposits:

A commercial bank receives deposits in four main types of accounts:

1. Fixed Deposit Account — Lumpsum deposit for a fixed period; higher rate of interest; cannot be withdrawn before maturity; no cheque book.

2. Savings Deposit Account — For small savings; low rate of interest; restriction on withdrawals; cheque book and pass book issued.

3. Recurring Deposit Account — Fixed amount deposited monthly for a fixed period (12 to 72 months); moderate rate of interest; no cheque book.

4. Current Account — For business firms; no interest paid; unlimited withdrawals; cheque book and overdraft facility available.

Types of Schemes for receiving Time Deposits:

A time deposit refers to a deposit kept for a fixed tenure. The main time-deposit schemes are:

1. Fixed Deposit Scheme — A lump sum amount is deposited for a fixed period, such as one year, three years or five years. The money is withdrawn along with interest on the maturity date. A higher rate of interest is paid on such deposits. No pass book or cheque book is issued; only a fixed deposit receipt is given.

2. Recurring Deposit Scheme — A fixed amount is deposited every month for a specified period, usually 12 to 72 months. On maturity, the depositor receives the total amount along with interest. A pass book is issued, but no cheque book is issued.