This document discusses various types of bank deposits available in India. It describes demand deposits like current and savings accounts that are payable on demand. It also outlines time deposits like fixed deposits that have a fixed maturity period. Other deposit types discussed include recurring deposits for regular savings, and deposit schemes for non-resident Indians like NRO, NRE, and FCNR accounts. The document also provides an overview of deposit insurance in India through the DICGC.

1. FACULTY OF BUSINESS
ADMINISTRATION &
COMMERCE
Bank Deposits

2. Introduction to Bank Deposits
 One of the most important functions of any
commercial bank is to accept deposits from
the public, basically for the purpose of
lending. Deposits from the public are the
principal sources of funds for banks.
 Bank deposits consist of money placed into
banking institutions for safekeeping. These
deposits are made to deposit accounts such
as savings accounts, fixed deposit accounts
etc.. The account holder has the right to
withdraw deposited funds, as set forth in the
terms and conditions governing the account

4. Time Deposits
 Time deposits are defined as those
deposits which are not payable on
demand and on which cheques
cannot be drawn. They have a fixed
term to maturity. A certificate of
deposit (CD), for example, is a time
deposit.

5. Fixed deposit
 Fixed deposit is investment instruments
offered by banks and non-banking financial
companies, where you can deposit money
for a higher rate of interest than savings
accounts. You can deposit a lump sum of
money in fixed deposit for a specific
period, which varies for every financier.

6. Recurring Deposits
 Recurring deposits :-Recurring deposits,
under which a fixed amount is deposited at
regular intervals for a fixed term and the
repayment of principal and accumulated
interest is made at the end of the term. These
deposits are usually targeted at persons who
are salaried or receive other regular income. A
Recurring Deposit can usually be opened for
any period from 6 months to 120 months.

7. Re-investment deposits
 Re-investment deposits, under which the interest
is compounded quarterly and paid on maturity,
along with the principal amount of the deposit.
Some banks have introduced "flexi" deposits
under which, the amount in savings deposit
accounts beyond a fixed limit is automatically
converted into term-deposits;

8. Demand Deposits
 Demand deposits are defined as deposits
payable on demand through cheque or
otherwise. Demand deposits serve as a
medium of exchange, for their ownership can
be transferred from one person to another
through cheques and clearing arrangements
provided by banks. They have no fixed term to
maturity.

9. Current Deposits
 A current account is a form of demand-deposit, as
the banker is obliged to repay these liabilities on
demand from the customer. Withdrawals from
current accounts are allowed any number of times
depending upon the balance in the account or up to
a particular agreed amount. Current deposits are
non-interest bearing.

10. SAVING DEPOSITS
 A savings account is an interest-bearing
deposit account held at a bank or other
financial institution. Though these
accounts typically pay a modest interest
rate, their safety and reliability makes
them a great option for parking cash you
want available for short-term needs

11. CASA DEPOSITS
 Among the three broad categories of
deposits—current Savings account deposits
together with current account deposits are
called CASA deposits.A current account
savings account (CASA) is aimed at
combining the features of savings and
checking accounts to entice customers to
keep their money in the bank. It pays very low
or no interest on the current account and an
above-average return on the savings portion.
CASA is most commonly used in West and
Southeast Asia, though the CASA structure is

12. NRO ACCOUNT
 These are Rupee accounts and can be opened by any
person resident outside India. Typically, when a resident
becomes non-resident, his domestic Rupee account gets
converted into an NRO account. In other words, it is
basically a domestic account of an NRI which help him
get credits which accrue in India, such as rent from
property or income from other investments. New
accounts can be opened by sending fresh remittances
from abroad. NRO accounts can be opened only as
savings account, current account, recurring deposits and
term-deposit accounts. Regulations on interest rates,
tenors etc. are similar to those of domestic accounts.
While the principal of NRO deposits is non-repatriable,
current income such as interest earnings on NRO
deposits are repatriable. Further, NRI/PIO may remit an

13. Non - Resident ( External) Rupee Accounts
 The Non-Resident (External) Rupee Account NR(E)RA
scheme, also known as the NRE scheme, was introduced in
1970. This is a rupee account. Any NRI can open an NRE
account with funds remitted to India through a bank abroad.
 An NRE rupee account may be opened as current, savings,
recurring or term deposit account. Since this account is
maintained in Rupees, the depositor is exposed to
exchange risk.
 Thus, a student going abroad for studies or a tourist going
abroad for brief visit is not an NRI.
 This is a repatriable account (for both interest and principal)
and transfer from/to another NRE account or FCNR (B)
account (see below) is also permitted. Local payments can
also be freely made from NRE accounts. NRIs / PIOs have
the option to credit the current income to their NRE
accounts, provided income tax has been deducted /

14. Foreign Currency Non Resident Account ( Banks)
 The Foreign Currency Non-Resident Account
(Banks) or FCNR(B) accounts scheme was
introduced with effect from May 15, 1993 to
replace the then prevailing FCNR(A) scheme
introduced in 1975.
 These are foreign currency accounts, which can
be opened by NRIs in only designated currencies:
Pound Sterling, US Dollar, Canadian Dollar,
Australian Dollar, EURO and Japanese Yen.

15. Comparison of Deposit Schemes
available to NRIs

17. Deposit Insurance
 Deposit insurance helps sustain public
confidence in the banking system through the
protection of depositors, especially small
depositors, against loss of deposit to a
significant extent. In India, bank deposits are
covered under the insurance scheme offered
by Deposit Insurance and Credit Guarantee
Corporation of India (DICGC), which was
established with funding from the Reserve
Bank of India. The scheme is subject to
certain limits and conditions. DICGC is a
wholly-owned subsidiary of the RBI.

18. Banks insured by the DI CGC
 All commercial banks including branches of foreign
banks functioning in India, local area banks and
regional rural banks are insured by the DICGC.
 Further, all State, Central and Primary cooperative
banks functioning in States/Union Territories which
have amended the local Cooperative Societies Act
empowering RBI suitably are insured by the DICGC.
Primary cooperative societies are not insured by the
DICGC.