What Do You Mean by a Bank Account?
by Abdul Aziz Mondal Banking Published on: 24 March 2021 Last Updated on: 07 November 2024
In English, when someone refers to taking account of something, it usually refers to a report of an occurrence or experience.
In financial terms, on the other hand, an account refers to the reports or records of financial transactions and receipts over a particular period. Then, the definition of a bank account may just be the record produced by a bank or other financial institution.
In the last few years, banking institutions have tried to come up with innovative ways to attract customers and offer additional account benefits. In this regard, Be Your Own Banker is a concept that is garnering a lot of attention. Infinite Banking is a customized process that enables you to link your banking to your insurance plans and policies.
In more polished terms, a bank account refers to the arrangements made with a bank in which the bank is allowed to keep track of all the transactions between the bank and the customer. Both individuals and organizations can open and maintain an account with appropriate financial institutes.
All the customers can also typically maintain multiple accounts at the same time – both with the same bank and others.
Types of Bank accounts-
Depending on your region and the bank, there are many different types of bank accounts. Many banks also offer some accounts to fulfill some specific requirements of their specific clients.
However, in general, there are three types of accounts that are most commonly offered, opened, and maintained with a typical bank. These are:
Current Accounts:
For those who usually make and receive payments more frequently than the general clients, banks offer current accounts for them.
It is a simple deposit account, which usually puts no transaction limits of any kind. It does, however, require a minimum balance to maintain in your account and doesn’t typically pay any interest.
A current account is more suited to traders, business people, entrepreneurs, etc.
Savings Accounts:
Perhaps the most commonly used account among the general masses, savings accounts are an attractive way to safely deposit your money and earn some interest. These accounts usually tend to have a daily transaction limit. Banks may offer a variety of savings accounts with different fixed interest rates to attract different customers.
Some popular examples include family savings accounts, institutional savings accounts, savings accounts for children or senior citizens, and many others.
Salary Accounts:
Slightly different from the two accounts mentioned before, a salary account is created as per the directives and agreements between the banks and a person’s employer.
This is the account where the employer pays the salary and other allowances. Sometimes, it’s possible to choose different features of the salary account to cater to your specific needs.
These days, trading accounts that were reserved for some privileged customers are also increasingly being offered to pretty much anyone, which allows the customer to trade on different financial instruments right from their usual banking platforms.
Some revolutionary fintech banks are also allowing their users to open and maintain multiple-currency bank accounts, which is a great way to pay and get paid from all over the world without paying a conversion charge every time.
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