Bank Deposits - Demand, Term, Recurring, Saving and Current Deposits

For any investment there are two important factors, risk and returns. For share market and Mutual Funds return is more but risk also high. At the same time bank deposits give medium returns with very low risk. It is a very safe method of investing if you are very much cautious about risk factors.

Now with increased inflation rate basic interest rates also in the upward trend. So all private sector and public sector banks are giving better interest rates for fixed and other deposits compared to last few years. There are many types of bank deposit schemes available like

Demand Deposit


Here money is not deposited for a specific time period. Investor can withdraw money at any time. Bank is responsible to return the money on customer’s demand. This account allows you to demand your money at any time.

Term Deposit

Under this scheme money is deposited for a fixed period of time so it is also called Fixed Deposit. Investor can withdraw the money only after the time period. Premature withdrawals are also allowed by paying a penalty. Interest is calculated on monthly, quarterly or yearly depends on the bank and scheme. Many banks offers loan or overdraft facility as an added features with fixed deposits. Term deposits is a safe investment and it is therefore a very good option for conservative, low-risk investors.

Recurring Deposit

This is another type of fixed deposit in with investor pay a small amount every month for a specific time period. For example pay Rs.1000/- every month for a period of 5 years. After 5 years he will get the principle with interest accumulated. A Recurring Bank Deposit is a good option for regular savings.

Saving Account

This is a kind of demand deposit with limited number of withdrawals during any specific period. Savings Accounts provides principal security and a modest interest rate. Now banks also put some restriction on the minimum balance. If customer don’t maintain the minimum balance customer has to pay a penalty. Now saving account comes with many features like ATM and Debit Card, Cheque Book, Free Internet Banking with Bill Pay, Fund Transfer, Prepaid mobile charging, Free Telephone Banking etc.

Current Account

This is another kind of demands deposit like saving account with unlimited withdrawals. There are many different Current Accounts available in today. From specialist young person’s bank accounts to Current Accounts (with overdraft), Cheque Accounts, Basic Bank Accounts, Student Accounts, Graduate Accounts, Foreign Currency Accounts and Current Accounts with special offers.

If you are looking for a long term safe investment option then Fixed Deposit is the best option. If you are a salaried and want to invest a small amount every month then go for recurring deposit. Since all private sector and nationalized banks follow the Reserve Bank of rules and regulations it is a very safe method of Investment.

Apart from these basic deposit patterns different bank have different investment options and criteria. Also interest rate varies from bank to bank. To attract more customers banks offers different fixed deposit schemes like Tax Saver Fixed deposits, Fixed deposits with life insurance, health insurance, free credit card, instant loan facility, pre-approved loans etc