Demand Deposits
1. Savings Account
2. Current account

Savings Account

As the name denotes, this account is ideal for parking your temporary savings. This account gives you a nominal rate of interest and you can withdraw money as and when the need arises. The position of account is depicted in a small book called 'Pass Book'. Such accounts should be treated as a temporary parking area because the rate of interest is much less than Fixed Deposits. As soon as your savings accumulate to an amount which you can spare for a certain length of time (even three months), shift this money to Fixed Deposit. It should be understood that your returns on the money kept in Savings Bank account are the least but the flexibility to withdraw is the highest.
Rate of Interest on Savings Account is fixed by RBI and is currently 4%.
Tips:
1. Choose a relatively smaller branch of a Bank for your savings account.
2. To open an account, you will require a photograph and an introduction from an account holder, preferably a current account holder of the Branch. Look for such a person before going to the bank.
3. Most banks have a minimum deposit requirement. Select a Bank which asks for the least amount, other conditions being the same
4. Insist on a cheque book.
5. Most Banks have restrictions on deposits. Understand the restrictions well at the time of opening the account.
6. Select a Bank which has minimum restrictions
7. Some Banks impose service charges on activities like issue of cheque book, pass book, transactions in the account. Obtain a full schedule of service charges before opening the account. Avoid the Banks which impose service charges on transactions.

Current Account

Current account is an account with minimum amount of restrictions. Most individuals do not need this account. You need this account only if you make a number of deposits and withdrawals in a single day and many of the deposits are drawn on outstation banks. Banks accept deposits in current account and allow unlimited withdrawals subject to a minimum balance. This minimum balance differs from Bank to Bank. NO interest is payable on a current account. Opening of a current account is indicated in the case of a business enterprise or high worth individuals who deal with a lot of third party cheques, drafts etc. or who may at times need to borrow money from the Bank against some security.
Tips:
1. Choose a relatively larger branch of a Bank for your current account which can give additional services.
2. To open an account, you will require a photograph and an introduction from a current account holder of the Branch. Look for such a person before going to the bank
3. Most banks have a minimum deposit requirement. Select a Bank which asks for the least amount, other conditions being the same
4. Insist on a cheque book in the first instance itself and count the cheque leaves.
5. Store your cheque book carefully.
6. Some Banks impose service charges on activities like issue of cheque book, issuance of statement of account, transactions in the account. Obtain a full schedule of service charges before opening the account.
7. Avoid the Banks which impose service charges on transactions.