When you are trading in stock, it make sense to also understand various bank account available in India and decide which one of them would be best suited for you need. Make sure that the bank you are choosing is a know bank, Beware of small cooperative banks and other small financial institutions which work as bank even when they don’t have proper approval.
The various type of bank account available in Indian banks are
Different types of bank accounts in India are as follows:
Saving account: This is the basic account which a individual can open in a bank. These account comes with some basic facilities like ATM, check books etc. Money kept in these account do pay interest but at a much lower rate than Fixed deposit. Just an example ICICI bank pays 4% in saving account while you can get 9.5% in Fixed deposit of 1 year. These account are used by salaried person and there salary in deposited directly in these accounts.
Current account: This account are generally owned by businessmen. They provided some specific facility to the account owner like Line of credit, multiple transaction everyday etc. These account generally don’t pay any interest to the customer but they are required for business purposes.
Fixed Deposit or time deposit account: These account are not generally opened separately but are linked to either Savings or Current account. You should try to but your excess cash in Fixed deposit so that you can earn better interest rates.
The above mentioned three accounts are the most common ones and most of the customer should be aware of these account. There are some other account mentioned below which are also supported by all the major banks in India.
Demat account are types of account in which you can keep shares you have purchased. Lately all the share are Dematerialized ie changed into electronic form and for keeping this you need a Demat account. These type of accounts are already needed for people who trades in shares. These share are kept in NSDL in electronic form.
NRE account: A Non-Resident External (NRE) account is a bank account that’s opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of traveler’s checks or notes. This account have certain benefits compared to other account. Firstly, this account is repatriable which means that you can deposit money in USD which would be converted to INR and in case you need money back in USD, you can do that. This is a big positive for NRI as they can avail better interest rate by keeping money in these accounts. The interest rate in these account are in the range of 6-7%. Secondly the interest earned on these account are non-taxable.
NRO account: A Non-Resident Ordinary (NRO) account is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. An NRI can also open this account by sending remittances from his home country or by transferring funds from his other NRO account. It offers the same facilities as an NRE account, but is non repartiable. Also the interest is these account are taxable.
Documents needed for account opening
Identity proof : Driving License, Election card, Aadhar Card
One Passport size photo
For NRE Account you need passport copy and VISA proof.