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Overview

These days money is managed mostly through banking and we have to develop appropriate skills to manage our finances . A bank is an establishment which is associated with the business of taking deposits and lending money.

Basic Requirement

  • Class 10 Student

Skills Covered

  • Diff Types Of Account

  • To Find Monthly Income

Expert Review

ICSE Class 10 Maths Solutions Banking Study Material is helpful for every student.in this course there will be detailed explanation of topics and problem solving.

Questions and Answers :

Banks and their functions: What are they? 

The purpose of a bank is to regulate the exchange of money between people. It aids with lending and storing money.  

The Functions of a Bank are:  

  • Interest is paid by a bank on money received as a deposit.  
  • Borrowers receive interest on their loans.  
  • Transacts in money from one account to another.  
  • Supplies loans. 
  • You'll find payments for public services like gas, electricity, water, telephone, insurance, education fees, etc.  
  • Revenues are collected from taxes such as sales taxes, income taxes, and house taxes.  
  • Controls the sale and purchase of securities and other securities. 

What steps do I need to take to open a bank account? 

An individual should follow these steps to open a bank account:  

  • To begin, a person needs to visit a bank and fill out an application. The form can also be obtained online.  
  • The account holder needs to write down complete information on the application form, such as their name, contact number, type of account, signature, etc. Afterwards, the form must be returned.  
  • To open an account, he must deposit a fixed first amount.  
  • Deposits are made by filling out a pay-in slip provided by the bank.  
  • Withdrawals can be made using a checkbook, withdrawal form, or ATM card.  

5. How does a recurring deposit work? 

For a fixed period, an account holder deposits a certain amount of money every month into a Recurring Deposit Account. The period may be as short as 3 months or if 12 years. The bank decides the length of the deposit. Account holders receive a lump sum amount at the end of the period, which includes the money that was deposited earlier, as well as the interest (Compounded quarterly) earned on the money. 

It is calculated as follows: Maturity Amount=Sum Deposit + Interest Gained. 

Your money is safe in bank accounts. Additionally, they allow you to earn interest on your deposits, helping you compound your investment or savings.  

ICSE Class 10 Maths Solutions Notes :These topics are important to understand the concept of banking ICSE board pattern before beginning the course.

In India, there are four types of banks: private banks, public sector banks, foreign banks, and cooperative banks. Citizens in India can open a bank account with any one of these four categories of banks.  

Understanding the kinds of bank accounts that all four types of banks offer will help you select a bank account that best fits your needs.  

You can choose from six kinds of bank accounts: 

1. Savings Account 

Consumers can save money by opening a deposit account. PAN cards and Aadhaar cards are required to open a savings account in India. Bank accounts also require these documents.

Key Features of a Savings Account 

Limitation. Savings accounts do not have a limit on how much money can be saved. Your bank may cap the number of transactions in some cases.  

Maintaining balance. In most cases, consumers are required to maintain a certain minimum balance in their savings account.  

Savings accounts opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY), the government's financial inclusion plan, are exempt from the minimum balance requirement.  

Each person is allowed to open one savings account with a zero balance under PMJDY. There are no limits on the amount or number of deposits you can make, and withdrawals are limited to four per month, including ATM withdrawals.  

Interest. Consumers earn interest on their savings deposits. Interest rates vary from bank to bank. State Bank of India, India's largest public sector bank, offers interest rates for savings bank deposits of up to INR 1 lakh at 2.70%.

A savings bank deposit at India's largest private sector bank, HDFC Bank, carries an interest rate of 3% on balances below INR 50 lakh.  

Benefit. Savings accounts are an easy way to earn interest on idle money sitting in a bank.

2. Current Account 

Money is frequently transferred between business accounts and current accounts. Corporations and business owners should use these accounts for daily business transactions.

Current Accounts: Key Features 

Limitation. A current account doesn't have a limit on how much money can be deposited. Transaction limits are also absent from current accounts.

Balance. Savings accounts require a lower minimum balance than current accounts.

Interest. Current accounts earn no interest for consumers.

Benefit. Overdraft accounts permit customers to withdraw more money from their accounts than they have available.

3. Salary Account 

Large corporations and businesses that pay their employees through banks ask banks to open these accounts. An employee may maintain a salary account in which the company they work for.

Key Features of a Salary Account 

Limit. Salary accounts can hold an unlimited amount of money. According to the disbursement made by their employees, each employee receives a salary. It is possible for employees to transact independently between these kinds of bank accounts.

Balance. Salary accounts are zero-balance accounts, meaning employees may withdraw all the funds credited in the account at any time.

Interest. Salary accounts do not earn interest.

Benefit. Savings accounts can be converted into these accounts at any time. These accounts can be converted into savings accounts by banks after three months of inactivity, which are regulated differently.

4. NRI Account 

Non-resident Indians can open these accounts in order to maintain a financial bank account in India. There are three types of NRI accounts:

Non-Residential Ordinary Account (NRO) 

Indian rupees are deposited in these accounts. These funds are earned in India.

Key Features of an NRO 

Limit. An NRO account can contain an unlimited amount of money.

Balance. You can maintain any amount of balance.

Interest. Taxable are both the principal and interest on the principal.

Benefit. The conversion rate does not affect these accounts. NRIs can open current accounts, savings accounts, and fixed deposit accounts through their NRO account.

Non-Residential External Account (NRE) 

Indian rupees are deposited in these accounts. However, the money deposited is not from proceeds earned in India; rather, it is money earned or saved in the country where the non-resident Indian lives.

Key Features of an NRE 

Limit: There is no limit to the amount of money that can be deposited into an NRE account.

Balance: A balance of any amount can be maintained.

Interest: Neither the principal nor the interest earned on the principal are taxable.

Benefit: A prospective change in conversion rate has an impact on these accounts. Through an NRE account, an NRI can open a current account, a savings account, or a fixed deposit account.

Foreign Currency Non-Residential Account (FCNR) 

In these accounts, deposits are held in the currency approved by the Reserve Bank of India, the central bank of India. NRIs and people of Indian descent can hold deposits in an approved currency they earn income in. In the case of income earned in a currency that is not on the approved list of currencies, the income is converted into an approved currency. Accounts with FCNR are often referred to as FCNR (B) accounts, with (B) standing for banks.

Key Features of an FCNR 

Limit. FCNR accounts can hold an unlimited amount of money.

Balance. Balance can be maintained in any amount. 

Interest. Taxable are neither the principal nor the interest earned on it.

Benefit. Changing conversion rates will have an impact on these accounts. The FCNR account allows NRIs to open a fixed deposit account with a minimum maturity of one year.

5. Recurring Deposit (RD) Accounts 

Consumers who would like to earn interest on their money open these accounts as deposit accounts. The most straightforward way to earn an income higher than that offered by savings accounts is to open a checking account, also called an RD.  

Recurring Deposits: Key Features 

Limit. An RD's minimum opening limit varies from bank to bank. RD accounts can be opened with any bank of the consumer's choice with a minimum limit as low as INR 1,000 per month.  

Balance. With RDs, consumers are able to collect a monthly amount set at the beginning of the account's tenure. 

Interest. Monthly, a fixed amount is deducted from the RD account and deposited there, where it earns interest month after month. Savings accounts generally earn lower interest rates.  

Benefit. The RD's flexible tenure makes it a consumer-friendly financial decision. If the funds are deposited in an RD, the consumer will earn interest on the deposited amount for anywhere between six months and ten years. It is possible to terminate an RD account before the end of the tenure without losing the interest earned.  

6. Fixed Deposit (FD) Accounts 

A time deposit account earns interest on deposits for a specified period of time until maturity. Among the safest ways to save and earn interest on idle money are fixed deposits.  

Fixed Deposits: Key Features 

Limit. The amount of money that can be deposited in a fixed deposit account is unlimited. Money allocation determines the amount of interest paid at the end of the account's tenure. 

Balance. In an FD account, a lump sum amount is invested.  

Interest. This deposit earns interest. Once the term of the FD has ended, the interest is paid. When FDs are broken during their tenure, consumers risk losing out on interest and often only receive the principal amount.

Benefit. Fixed deposits offer high returns without any risk. Due to the fixed tenure benefit that banks enjoy with FDs, most banks in India offer FD interest rates higher than savings account and RD interest rates. Banks can hold large sums for a fixed period of time, while consumers can earn higher volatility-free returns, making this financial instrument a win-win for both.  

Conclusion 

The Indian banking system is tailored to suit the needs of different age groups and genders. It also includes the public sector and private banks to enable all citizens to become financially independent.  

In order to empower the collective efforts of the nation in growing together, the country must take small but bold steps toward financial inclusion while increasing citizens' awareness and knowledge. 

ICSE class 10 maths covers all the tops and chapters related to to board pattern. For better preparation for board exam, students must solve previous year question papers after completing the course.


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Course creator


                                 Reshma B

Reshma B

I Am a Senior Trainer with Teaching Experience More than 15 years, and also I am specialised in Maths and Science subject.