Types of Bank Accounts and Their Features

Types of Bank Accounts and their features being offered by Pakistani banks

Whether you are searching for the best Best Bank for Car Loan or the bestBank accounts which provide security, safety, and convenience for your funds, you have a host of choices. You can choose from different types of bank accounts which serve a host of purposes. Some types permit regular spending or paying bills, while some are structured for short to long-term savings. The most common types of bank accounts include:

  • Checking or current accounts
  • Savings accounts
  • Money market accounts (MMAs)
  • Certificate of deposit accounts (CDs)

For understanding how different bank accounts operate and how they can benefit you, you have to do a detailed comparison.

Checking or Current Account Basics

A checking or current account is a bank deposit account which you can open at any bank with a physical presence. Some general features of these accounts include :

  • These accounts can be used for holding funds or spending them without any restrictions.
  • Debit/ATM cards and chequebooks are provided.
  • You can link these accounts to your other types of accounts such as savings accounts.
  • It should be noted that various banks may offer some different or additional features for their current accounts.
  • These are the most common types of bank accounts available in most countries.
  • Some banks may have a minimum balance requirement which may vary from bank to bank.
  • Schedules of charges apply to these accounts for availing of different facilities such as inter-bank transfer facility or ATM withdrawal from a different bank’s ATM.

Choosing a Current Account

When you have to choose between current accounts of different banks, you should compare the following:

  • Minimum deposit and balance requirements
  • Account maintenance fees
  • Other fees, such as overdraft or ATM fees
  • ATM network
  • Online banking and smartphone applications.

Basic Banking Accounts or BBA

Pakistani banks also offer BBA or Basic Banking Accounts. These accounts have been specially designed to support the low-income salary groups in the country. These accounts have the following important features :

  •  A minimum initial deposit of Rs 1000
  • No maintenance fee and no requriement for minimum balance.
  •  Non‐remunerative account 
  • Any BBA which has no balance for six months will be closed. 
  • No fee for Two deposits and two withdrawals ( through cheques) per month 
  • No charge on the bank’s ATM withdrawals 
  •  BBA can be converted to a full-service account.

 Basics of Savings account

  • Savings accounts are another highly common deposit account offered by almost every bank. 
  • The basic difference between savings and current accounts is that you earn interest on your funds in savings accounts. 
  • The interest you earn depends on the amount and time. 
  • Just like current accounts, savings accounts typically have a minimum balance requirement as well as maintenance fees.
  • In Pakistan, there are no restrictions on the frequency of withdrawals or deposits.
  • Debit cards are allowed for withdrawing cash and making payments.

Choosing a Savings Account

Choosing a bank for opening your savings account can be tricky as all banks offer them and there might not be a significant difference. Compare the following to arrive at a decision :

  •  Minimum deposit and balance requirements
  • Compare the offered rates of various banks and select a high-yield account.
  • Don’t just compare rates, try getting an estimate of annual yield.
  • Online banking and smart apps are a must these days for checking your account balances, making calculations, and payments.

Basics of Certificate of Deposit CDs/ Term Deposit Accounts 

  • CDs or term deposits are Types of Bank Accounts which have a fixed term. For instance: Six months, one year, and so on.  
  • Term deposit accounts are opened for earning interest in a specific period. 
  • Once the term deposit reaches maturity, you have the option of withdrawing your deposit plus the earned interest or re-invest the entire amount in another term deposit. 
  • The longer the term of deposit, the higher the earned interest.
  • Withdrawals or making payments from these types of accounts are not allowed. 
  • For any emergency withdrawal, you will be charged a penalty.

Choosing a term deposit account

The most significant factor when considering a term deposit is the maturity term. You have chosen a term deposit most probably because you want to save for a future need. The term should match the timing of your need. Other factors to consider include the interest rate being offered. Compare the rates of a few banks and also compare their annual yield.

 economic development of the country. è The bank can also invest such funds in profitable areas. 

 Foreign Currency Accounts 

Bank in Pakistan also offers foreign currency accounts. 

  • Currently, the allowed currency includes USD, GBP, Euro, and Japanese Yen.  
  • Withdrawals can be made in either the foreign currency or PKR. 
  • All Pakistani nationals whether residents or in any other country including dual nationals are eligible
  • Foreign nationals, whether in Pakistan or residing abroad are also available in Pakistan.
  •   International Organizations functioning and established/incorporated in Pakistan are also eligible.
  •  Deposits are only accepted in the denominated foreign currency.
  • No limitations on funds transferred to other countries.
  •  Credit card facilities are allowed. 

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