Types of Accounts:

  1. Savings Account:


  • For those who wish to save a small sum of money
  • Maintained on monthly basis
  • No deposit limits
  • But there are limits to withdrawal of cash
  • Prior notice has to be given before withdrawing large sums of money
  • Low interest rate
  • ATM’s can be used
  • Cheque book is issued
  • Suitable for salaried persons
  • No bank charges on operating account


  1. Current Account:


  • Usually maintained by businesses
  • No limit for withdrawal
  • Used for large sums of money
  • No interest is paid
  • Bank charges have to be paid for operating the account
  • Services such as overdraft, standing order, direct debit, credit transfer etc are available


  1. Fixed Deposits Account:


  • Based on an agreement between bank and customer
  • Money is deposited for a specific period of time
  • Money can’t be withdrawn until that period ends
  • In case of early withdrawal, customer has to forego interest
  • High interest rate
  • Suitable for anyone who has extra money
  • No bank charges on operating account

Services Provided by Banks:

  1. Paying in Slip:


  • Used for depositing money in banks
  • A slip which acts as documentary evidence that money has been deposited


  1. Bank Statement:


  • Sent at regular intervals by bank to account holder
  • Contains a record of all transactions along with dates


  1. Agency Services:


  • Banks provide investment advisory service
  • Buys and sells investments and collects dividends on behalf of its customers
  • May offer tax consultant services
  • May act as an executor or trustee of real estate or property
  • May even arrange for insurances desired by customers


  1. Foreign Exchange Services:
  • Banks sell foreign currency and finance foreign trade by discounting bills of lading
  • Also make remittances abroad for customers


  1. Safe Deposit Boxes:


  • Banks rent out lockers to customers who want to keep their valuables safe


Means of Payment in Home and International Trade:

  1. Cash:
  • Suitable for small amounts only
  • Chances of theft
  1. Cheques:
  • A bill of exchange, drawn on a bank instructing it to pay some other person a certain some of money on demand
  1. Credit Transfer:
  • A means by which one or a number of accounts can be paid simultaneously
  • Such as a firm can send wages for it employees in one transaction
  1. Standing Order:
  • Instructions to banks to pay regularly a sum of money from one’s current account in order to settle recurring payments like mortgage repayments, rents etc.
  1. Direct Debit:
  • A facility provided by the bank whereby the creditor instructs it to debit the debtor’s account and credit his own as regular payments are made between parties
  1. Electronic Transfer:
  • A service in which payer goes to the bank and deposits some money
  • This money is then transferred within minutes to the desired branch, from where the receiver can collect them
  1. Bank Drafts:
  • An order drawn by one bank upon another, demanding the drawee bank to pay a specified sum of money to the payee
  1. Debit Cards:
  • Issued by banks to pay through these while shopping on the bank’s behalf and the bank can deduct the amount from customers bank
  1. Documentary Credits:
  • A guarantee by a bank addressed to the exporter of goods stating that payment will be made provided that the terms of credit are adhered to and the documents representing goods are surrendered to the bank

Modern Trends in Banking:

  1. Tele banking
  2. Internet banking