Banking Account

By: EconomyWatch   Date: 9 September 2010

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A brief introduction to banking account:

A banking account refers to an account provided by a bank for keeping ones money as well as availing or performing transaction within the purview of the banking system.

A banking account may be of different types:

Depending on the balance a banking account holds, a banking account can be referred to as a debit banking account or a credit banking account.

A banking account is said to be debit banking account when the customer is required to pay money to the bank.

A banking account is said to be a credit banking account when the banking account contains money of the customer.

On the basis of the various roles a banking account plays, a banking account can be listed as under:

  • Savings banking account:
    In order to draw money form the savings banking account, one needs to access an ATM (automated teller machine) or any associated branch.

    There are few banks which require a savings banking account holder to keep a minimum balance in the savings banking account.

    The transactions taking place in the savings banking account is recorded by means of any of the following.

    • Passbook
    • Banking statement.
  • Transactional banking account:
    A transactional banking account is a credit banking account which makes funds available to the customers promptly through a number of processes.
    • Cash
    • money order
    • check
    • giro
    • direct debit
    • standing order
    • ATM
    • debit card
    • SWIFT.
  • Low cost account:
    Low cost banking account is prevalent only in Canada. Low cost banking account charges are very nominal. Not all banking accounts fall in the category of low cost banking account.

    There are few banks offering low cost banking account. The characteristics of the low cost banking account can be enumerated as below:

    • One can make deposits which do not attract any fees.
       
    • A low cost banking account also permits an individual to perform transaction using a debit card.
       
    • Transactions also comprise of checks.
       
    • The bank statement is generated without any fees imposed.
       
    • The passbook is also updated without the bank charging anything extra to the customer.
       
    • The low cost banking account also allows an individual to perform transactions numbers ranging between 8 to 15.
       
    • The fee imposed under no circumstance exceed the fixed Canadian $4.00.
  • Time deposit or term deposits banking account:
    Term deposit banking account or a time deposit banking account, refers to a banking account from which money cannot be withdrawn for a fixed period of time.

    The period or the time when a term deposit banking account holder cannot draw money depends on the term or time of deposit opted for by the term deposit banking account holder.

    Term deposits also called time deposit can be referred to as a small time deposit banking account if the fund deposit is $100,000 or less than that amount.

    On the contrary, if the banking account deposit has deposit fund above $100,000, the term banking account is said to be large term deposit banking account.
     

  • Numbered banking account:
    Numbered banking account provides a banking account holder with a code name. The code name is provided by banking account provider for the convenience of the customer as well as the banker.

     

  • Negotiable Order of withdrawal account:
    Negotiable Order of withdrawal account is a deposit banking account providing check facilities.
     
  • Automatic transfer service account:
    Automatic transfer service account is a deposit banking account which grants an automatic transfer service account holder to transfer money from a saving banking account to a checking banking account.
     
  • Money market deposit account:
    Money market deposit account is a kind of deposit banking account regarded more or less similar to a saving banking account.

    Check facility is offered by a money market deposit account under certain conditions.
     

  • Individual saving banking account:
    Individual saving banking account is a banking account designed for investment funds and savings.

    Prior to opening a banking account one must read carefully between the lines and thoroughly go through the fine print.

    Banking account is subjected certain laws and regulation which the bank must comply with for providing optimum service to the banking account holder.


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