In India, banks are divided into three categories. First are Public banks that are run by government for example- SBI, PNB. Second are private banks that run by a group of members for example- HDFC bank, Axis bank. Third are foreign banks that belong from other country for example- city bank, Bank of America.
All above three category of banks provide offer to people to open a bank account in India but the accounts that bank offer are of different categories. All type of accounts have their own benefits and we should have some basic knowledge about all different categories of accounts so that we can select which type of account will be suitable for us. Let’s discuss all type of bank accounts one by one:-
types of accounts
1) Current account- Mostly current accounts are business accounts. Many businessman open this account because this account make their frequently financial transactions more comfortably. These accounts are best for business owners for their business transactions. features of this account are:
- No maximum amount holding limit
- No limit on monthly and daily transactions
- high rate of minimum balance maintenance as compared to other accounts
- Interest will not be provided
- easily get loan in account
- easily convertible to saving account
2) Saving account- This account is for the purpose of save money. Mostly people open this account in the bank to keep their savings at a safe place. Main benefit of this account is customers will get Interest when they open saving account in the bank. rate of interest will be different in different banks because this rate is decided by bank itself. features of saving account are:
- No fees will be charged on deposit of money
- Interest will be provided
- withdrawal of money every month in limited
- Maximum amount holding limit will be applicable
Savings account can also be different as per of age and purpose of people. Different type of savings account are:
- Regular Savings account- This is normal saving account that every adult and other persons open in the bank.
- Zero-balance savings account- There will be no requirement to maintain minimum balance in this type of savings account. You can also open your savings account at zero balance (without money) in banks.
- women’s savings account- This type of savings account are specially open for women. All women will get their right money and benefits under government schemes in this account.
- kids savings account- This type of account will specially open for kids and children. This account required less documents to open as compared to other savings account.
- Senior citizen savings account- This account is open for old people and senior citizens of the country. They can save their money in this account and along with this they also get their pension from the government in this account.
- Family savings account- This account is open by family members simultaneously in the bank. More than one and two people can open this account together.
In most of the savings account bank expect some minimum balance from their customer and if we talk about interest, bank provide 3-4% of interest on savings account as per bank and type of savings account.
3) Fixed Deposit Account (FD account)- This accounts are made for a fixed time period on a fixed deposit to earn high rate of interest. This account hold high rate of interest as compared to other accounts. but the condition in this account is only that after deposit of money in the account customer cannot withdraw the money for a specific time period for example- for 3 years, for 5 years. Fixed Deposit account consider as one of the most safest option to earn high interest on idol money. features of fixed deposit account are:
- No fixed limit of amount
- Minimum time period of a FD is 7 days and maximum is 10 years
- high rate of interest
4) Recurring Deposit Account (RD)- Recurring deposit is as similar as fixed deposit but the change here is that customer submit the price of his RD in installments. For example- A person goes into the bank and opened a RD account of rupees one lakh. Now, he can pay his amount of RD in installments as per of his convenience. If he feel convenient to pay 10,000 every month then he will pay his rd amount for next 10 months to complete it. If he feel convenient to pay 20,000 every month then he will pay 20000 every month and as per decided. Once installment price and time period deposit of installment price fixed by bank and customer, it cannot be change further. A person can deposit his installment money monthly, yearly, quarterly, and half yearly. features of Recurring Deposit account are:
- Any figure of amount can be deposited
- Minimum time period of a RD is 6 months and maximum is 10 years
- high rate of interest
5) Salary Account- Salary account is only for those people who are working in organizations and get their salary monthly. People open this account to get their monthly salary in banks. In salary account, organization tie up with a particular bank and open its all employees salary account in that particular bank. After opening of accounts, organization start to send its employee’s salary in that bank account. Different organizations access different banks to open their employee’s salary account. It is not compulsory that all organizations will open their account in only one particular bank. organizations have option to select their own bank. features of salary account:
- Salary account works as saving account
- salary accounts are zero-balance accounts because this account is opened by companies for employees
- employees can withdraw and transfer whole amount of money from the account
6) NRI Accounts- NRI accounts are also known as overseas accounts because this account is mostly opened by those people who belong from India but lives in different country. NRI account is of three types:
- NRO- NRO means Non-resident ordinary savings account or FD accounts. When Indian people deposit their foreign money in NRO account then this account will automatically convert that foreign money into Indian rupees as per of exchange rate. Interest that people earn through this account in bank will be taxable. People can also keep the money that is earned in India in this account.
- NRE- NRE means Non-resident external savings account or FD account. NRE is mostly similar as NRO but the only difference is that, people can only keep the money in this account that will be only earned in foreign countries. Means people can keep only foreign currency in this account. Indian currency will not be acceptable in this account. Due to this reason, Interest earned on this account will not be taxable in India.
- FCNR- FCNR means Foreign Currency Non-resident account. This account is different from NRO and NRE accounts because in FCNR, accounts are maintained in foreign currency instead of Indian currency and because of this, Interest earned on this account will not be taxable in India.
7) Demat Account- Demat account is opened by those people who trade and invest in share market. All transactions of buying and selling of shares will be happen in this account only. If a person is beginner in share market and want to trade in share market then it will be primary thing for him to open a demat account in any bank. You can also open a demat account through a broker. I will suggest you open a demat account through broker because if you open this account in bank then bank will take more brokerage charge from you. Today online broker is also available when people do their trading in share market through an online app.
maslow’s hierarchy of needs theory was given by Abraham Maslow. In this theory, he explains what is basic expectation of a person throughout of his life. As per maslow’s hierarchy of needs theory, a human being spent his all life to achieve 5 type of needs that we will discuss further.
maslow’s hierarchy of needs theory
1) Physiological needs- Physiological needs means daily needs that we want in our life. for example- food, water, shelter, etc. This is first basic need of a person that he wants to achieve. Without this need, nobody can survive.
2) Safety needs- After satisfied from first need, person start to follow his second need and that is safety needs. As, we can consider from the name safety need means to secure himself. For example- Job safety, property lands, secure bank balance, safety around him, etc.
3) Love/belonging needs- We also know this need from the name of social need. This need includes your social life need. for example- relation with family and school friends, love, attraction, support from other people, etc. Basically, this need includes your relationship with other people. After fulfilling of safety and physiological needs both, person started to want that he make his own family, build healthy relationship with other people and big communities.
4) Esteem needs- Esteem need means expectation of respect from other people. After achieving above all three needs, person started to want value and his own identity in the society. he started to expect respect from other people in the society. In Esteem need, there is also two factors:-
- Internal esteem- Internal esteem means self-respect, achievement, power, etc.
- External esteem- External esteem means recognition and good status in the society.
5) Self- actualization need- This is last and highest need of a person that comes after fulfillment of all above four needs. As per of data, there are very few people present in the world who reached at this last need. Abraham Maslow was first psychologist who took self-actualization as an important factor in human needs.
In simple words self-actualization means to understand our own inner personality and develop it as much as we can. To understand our internal powers and potential properly. In self-actualization, we analyze our overall personality and try to enhance it.
If we talk about why most of the people do not reach at this need then after achieving of all first four need, person does not give attention to this last need because after achieving first four needs he started to think that he has achieved all things in his life.
Why is Maslow’s hierarchy of needs important?
Maslow’s hierarchy of needs is a psychological theory that is very important for those people who are studying and interested in Psychology. This theory help us to understand the step by step needs of an individual that he wants throughout his life.