The banking system of Russia includes credit organizations that have licenses to carry out their activities. Each banking institution has its own client base, for which its own programs and products are developed, and accounts are opened for the storage and use of funds. All accounts can be divided into various types, including a deposit or current account. About how to distinguish one from another, we will tell in this article.
Accounts and their varieties
There are three main types of accounts, these include:
- Deposit.
- Current.
- Card.
The most common area for using a current account is the transfer of wages, as well as the implementation of payments for various purposes. It is not suitable for investment and long-term cash deposits. The main purpose of such an account is to serve the customers of a particular bank and gain instant access to their own funds. Many are interested in whether their card account is deposit or current.
The latter does not provide for the accrual of interest on the residual amount, and if this is provided for by the terms of the bank, then the accruals will be minimal. Accounts of this type are opened not only in rubles, but also in foreign currency. With their help, you can cash out funds, transfer money to other accounts, as well as receive and make transfers. This is what the current account means.
Checking account
One of the varieties of the current account is settlement. Its opening is carried out by enterprises that are not involved in credit activities, as well as individual entrepreneurs and other individuals for the implementation of settlement operations in the course of doing business.
Clients often cannot figure out whether their account is escrow or current.
Card account
Card is intended for operations with funds through plastic bank cards. If the bank makes an offer to open this type of account, it is necessary to clarify the following points:
- The cost of servicing an account.
- Charge a commission for cashing money through a cash desk or ATM.
- Features of using the card in other countries.
- Paid additional services.
Types of cards
Two types of cards are distinguished - credit and debit. The latter lists the client’s salary and other income. Debit cards are also used to make purchases by cashless payment. The amount available on the card cannot be exceeded only if an overdraft is not provided on it.
Credit cards are borrowed funds when the limit on the account may be exceeded under certain conditions. This happens if the borrower has established itself as a reliable payer when repaying debts. Credit cards are very popular among the population of Russia and other countries. It is quite convenient to use them, however, the rates on them are too high, especially in comparison with ordinary consumer loans. However, there is the concept of a grace period, using which you can return funds without interest for a certain period.
Some banks offer customers to attach a current account to a card account. This makes it possible to combine its use with credit and debit cards. Such accounts allow you to use cash on them at any convenient time.The absolute advantage of plastic cards is that there is no need to spend time going to the bank, many organizations offer to use online services.
Deposit
A deposit is a bank account that is opened with one specific purpose - to increase the available cash. The bank accrues interest on the money invested. This is the easiest form of passive income when investing brings income with minimal risk. However, interest on such accounts is minimal. Deposit conditions vary among different banking organizations. The main scheme is the lack of access to the client’s account within the agreed period. For this period interest is accrued in the amount stipulated by the terms of the bank.
The difference between deposit and current account
Unlike a deposit account, a current account involves access to funds at the request of the client. Using a current account, you can pay for services or purchases in stores. Interest, as mentioned above, is not charged to such an account, or have minimal values.
A bank deposit account is the amount of money that is stored in an institution for a certain period with interest accrual. The owner’s instant access to funds in the deposit account is not provided.
Summarizing the above, we can distinguish the main differences between the current account and the deposit:
- Cash storage mode.
- The amount of accrued interest.
- Service fee.
It will not work to use the deposit for purchases or transfers, it is intended for other purposes. Such a restriction allows the bank to manage the funds deposited into the account at its discretion.
It can be difficult to understand whether a client has a deposit or current account.
Sometimes the conditions for opening a deposit suggest that it is not possible to withdraw money ahead of schedule. It is for this reason that the bank provides its customers with increased interest rates on deposits.
Now it’s clear what the deposit and current accounts mean.
The main components of the deposit are:
- Interest rate. Interest is accrued for the bank using your money.
- The term for which the deposit is opened.
- Insurance. If the bank leaves the market, the depositor will be paid his money in an amount not exceeding 1.4 million rubles.
- Sometimes a deposit involves replenishment of an account.
The deposit account is canceled by writing two applications - to close the deposit and account. After closing the account, funds are transferred to the client’s current account or cashed in a bank. What is a deposit and current account with Sberbank?
Sberbank PJSC
Sberbank has established itself as a reliable and stable organization. For this reason, many customers prefer to choose it for opening deposit and current accounts. Currently, the bank offers the following deposit programs:
- “Save.” It does not provide for replenishment and withdrawal of funds from the account, but allows you to close it ahead of schedule. The rate is 9%.
- "Keep your retirement." Suitable for senior citizens.
- "Replenish." It can be increased, and the interest on the deposit will be 8%.
The remaining deposits from Sberbank involve a partial cash withdrawal. Among such contributions, one can single out “Multicurrency”, “Manage” and “International”.
Amendments to the law on bank accounts
As a rule, operations on deposit accounts are reflected in the savings book. However, recently their issuance has been greatly reduced. The books were replaced by Maestro cards. Since the beginning of 2016, the Government introduced a bill according to which savings books were abolished.
However, many clients, especially in old age still prefer to use books and certificates, as they are easier to understand than in modern maps.They perceive the book as real evidence of the presence of their money in the bank and trust only them. Young people, by contrast, use only plastic cards, perceiving savings books as a relic of the past.
findings
Thus, understanding the types of accounts is quite simple. And the differences between the current and deposit accounts seem completely obvious. Everyone uses banking services. And if not everyone has a deposit, then the current account is widespread, not to mention the plastic cards attached to them. This is a modern trend that makes banking operations more convenient and expands the possibilities for managing your finances.
If we talk about deposit accounts, it is necessary to carefully approach the choice of the bank, because not only the increase in invested money, but also their safety will depend on its reputation and reliability.
It is important for each of us to know what type of (deposit or current) account is open at the bank. We examined the difference between the two.