Acknowledgment

I would like to take this opportunity to express my heartfelt gratitude to my teacher, MANJU
MISS, for their guidance and support in completing this assignment. Their explanations and
suggestions helped me understand the topic better and complete my work with more
confidence.

A special thanks to my parents and friends for their encouragement, patience, and support
throughout the process. Their motivation kept me focused and determined to complete this
assignment on time.

Finally, I am grateful for all the information and materials that helped me complete this work.
This assignment has given me a better understanding of the topic, and I truly appreciate the
learning experience.

INTRODUCTION

Banks provide different types of accounts to help people manage their money safely and
efficiently. Some accounts are meant for saving, while others are used for daily transactions
or long-term deposits. Each type has its own benefits, and the interest rates vary depending
on the bank and the account type.

This study aims to give a better understanding of banking options so that people can choose
the right account based on their financial goals.

in this assignment, I have conducted a survey on different bank accounts and the interest rates they
offer. The types of bank accounts covered in this study include Savings Accounts, Current Accounts,
Recurring Deposit (R.D.) Accounts, and Fixed Deposit (F.D.) Accounts. The comparison of interest
rates across banks will show which of these accounts are more beneficial for different needs.

Savings account
Savings Account

A Savings Account is a bank account in a retail bank designed to securely store money while earning
interest. Common features include lack of cheque, limited transfer options and inability to be
overdrawn. Traditionally they were recorded in a passbook and were called passbook savings
account and bank statements were not provided. however nowadays it is available online and are
recorded. It is ideal for short-term savings and keeping funds easily accessible. Most banks offer
savings accounts with services like debit cards, internet banking, and online bill payments.
While savings accounts have no upper limit on deposits, they may have minimum balance
requirements and limits on withdrawals, depending on the type of account. Regular savings accounts
usually have lower balance requirements than privileged accounts. Banks offer various types of
savings accounts such as Joint, Family, Senior Citizens, Kids Savings Accounts, regular savings
account, zero balance savings account etc.

Pros and Cons of Savings Accounts

Pros
• Easy to use
• Can be linked to a checking account
• Withdraw balance at any time
• Up to $250,000 insured

Cons
• Pays less interest than other investment options
• Easy access may lead to temptation to withdraw
• May require a minimum balance

Interest Rates on Savings Accounts

Bank Name Interest Rate (General Savings Account) When opening a savings
account, one of the key factors
Federal Bank 3.00% - 3.50% p.a. to consider is the interest rate
offered by different banks.
Reserve Bank of India 3.00% p.a.
Interest rates can vary
State Bank of India (SBI) 2.70% - 3.00% p.a. significantly depending on the
bank and the type of savings
account you choose. Higher
interest rates can help your
savings grow faster, while lower
rates might offer less benefit.
Below is a comparison of
interest rates offered by some
of the major banks in India,
which will help you understand
the options available.

Interest Rates Offered

by Major Banks

Current Account
A current account, also known as a transaction account or, checking account, is primarily
used by businesses, corporations, and public enterprises for frequent and large financial
transactions. It allows unlimited deposits and withdrawals but does not earn interest due
to its high liquidity. A key feature is the Overdraft Facility, which lets account holders
borrow even when their balance is low.

Advantages:

 Allows unlimited transactions, making it ideal for businesses

with high-volume transactions.
 Provides an overdraft facility, enabling businesses to access
short-term credit.
 Offers internet and mobile banking, facilitating quick and
seamless business transactions.

Disadvantages:

 No interest is earned on deposits.

 Higher fees due to frequent corporate transactions.
 Complex paperwork and additional service costs.

Interest Rate Offered on Current Accounts

Unlike savings accounts, current accounts are primarily designed for business transactions and do
not typically offer interest on deposits. However, some banks provide nominal interest rates on
premium or special-category current accounts. The interest rates, if applicable, vary from bank to
bank and depend on factors such as minimum balance requirements, account type, and banking
policies.

Recurring deposit accounts

A Recurring Deposit (RD) is a term deposit that allows individuals to invest a fixed amount
monthly for a chosen period, ranging from 3 months to 10 years. At maturity, the account
holder receives the total deposited amount along with interest, which is compounded
quarterly at a rate set by the Reserve Bank of India and revised periodically.

Banks offer RD tenures with senior citizens typically receiving higher interest rates. Unlike
Fixed Deposits (FDs), RD interest is paid only upon maturity. RDs can be funded through
standing instructions, where the bank automatically debits the amount from the savings
account. Sufficient balance must be maintained for this. Additionally, loans of up to 80-90%
of the RD value can be availed against it

Pros of Recurring Deposit (RD):

1. Guaranteed returns with fixed interest rates.

2. Encourages disciplined savings with fixed monthly deposits.
3. Can be managed online, with some banks offering flexible options.

Cons of Recurring Deposit (RD):

 1. Lower liquidity—funds are locked until maturity.
2. Lower interest rates compared to other investment options.
3. Fixed monthly commitment—deposit amount cannot be changed.

Interest Rate Offered by Major Banks in India

The interest rates on Recurring Deposit (RD) accounts vary across different banks and
depend on factors such as the deposit tenure and the depositor’s age. Typically, banks
offer higher interest rates to senior citizens as an added benefit. These rates are
reviewed periodically and are influenced by the broader monetary policy of the
Reserve Bank of India. Knowing the current interest rates offered by major banks can
help individuals make informed decisions when choosing where to open their RD
account.

Bank Name General Public Rates (p.a.) Tenure Details

6.50% - 6.75% 3 to 10 years.
State Bank of India (SBI)

HDFC Bank
6.90% - 7.20%

Conclusion\

Recurring Deposits are a reliable and low-risk saving option, ideal for building a habit of regular
saving. With an average interest rate ranging from 6% to 7% per annum, RDs offer steady returns
while ensuring capital safety, making them a popular choice among conservative investors

Fixed deposit
A Fixed Deposit (FD) Account is a secure investment option where a lump sum amount is
deposited for a fixed tenure at a predetermined interest rate. FDs are offered by banks and
financial institutions like NBFCs and HFCs. The tenure can range from 7 days to 10 years,
and interest is compounded monthly, quarterly, or annually. Once matured, the amount can
be withdrawn or reinvested. Senior citizens usually receive slightly higher interest rates.
While early withdrawal is allowed, it comes with penalties. Loans can also be availed against
FDs.
FDs are ideal for risk-averse investors as they offer guaranteed returns unaffected by market
fluctuations. Some tax-saving FDs provide benefits under Section 80C of the Income Tax
Act.

Advantages

 ✅ Guaranteed Returns: Not affected by market ups and downs.

 ✅ Safe Investment: Regulated by the Reserve Bank of India.
 ✅ Loan Option: Loans can be taken against FDs during emergencies.

Disadvantages

 ❌ Lower Returns: Less profitable compared to stocks or mutual funds.

 ❌ Limited Liquidity: Premature withdrawal comes with penalties.
 ❌ Taxable Interest: Interest earned is fully taxable.

Interest on Fixed Deposits

Interest on Fixed Deposits (FDs) is the fixed return earned on a lump sum deposited with a
bank or financial institution for a specific period. Unlike market-linked options, FD interest
rates stay constant, offering stability and predictability. Interest is usually compounded
monthly, quarterly, or annually, making FDs a popular choice for low-risk, steady income.

Banks

Conclusion

Fixed Deposits are a safe and reliable investment option with steady returns. As of April 2025, the
average FD interest rate in major Indian banks ranges from 6.50% to 7.50%, with senior citizens
getting around 0.50% extra.

Conclusion
Bank accounts play an important role in helping us manage money safely and wisely. Through this
assignment, we have learned about various types of accounts such as Savings, Current, Recurring
Deposit (RD), and Fixed Deposit (FD), each designed for different financial needs.
Savings Accounts are ideal for everyday use, while Current Accounts are best suited for businesses
and frequent transactions. RDs help us save regularly every month, and FDs offer higher, fixed
returns over a specific time period. Interest rates differ from one account type to another, and
understanding these differences can help us make better financial choices.
By gaining knowledge of these account types, their features, and their benefits, we can plan our
savings, meet our financial goals, and develop good money habits for the future.