Operations of deposit accounts varies types of customers mainly individual customers and business customers. Accounts of individuals comprise a majority of the deposit accounts in Personal segment of most banks. Any individual who is a major and of sound mind can open a - Savings account and / or Fixed deposit accounts.
We will look in to each of them in details.
Bank's Customer as Individuals
Accounts of individuals comprise a majority of the deposit accounts in Personal segment of most banks. Any individual who is a major and of sound mind can open a - Savings account and / or Fixed deposit accounts.
An account for a minor child can also be opened and operated by the Father / Mother / Guardian. This minor's account can be operated in one of the following modes (child will operate the account only on attaining the majority):
- In the single name of the child through the father / mother / guardian.
- In the joint names of the father / mother / guardian and the child (payable to either or survivor).
- "Kids accounts" - Many banks allow minor children above specified age to open and operate savings account in their single name. These accounts have certain limitations on withdrawals. This is to inculcate savings and banking habits in the children while they are young.
Bank's Customer as Joint Depositor
Joint deposit accounts are accounts that are opened by multiple number of people coming together for some specific reasons or convenience. For practical reasons the transactions are done by:
- One of the persons who is on the account as a account holder
- Jointly by two or more persons
Their transactions would be accepted as per the instructions given for at the time of opening of the account. These are generally as: Either or survivor / Former or survivor / Both jointly or survivor / Any two jointly or last survivor.
Deposit Accounts with Illiterate Persons
Illiterate persons who cannot sign are allowed to open only Savings account (without cheque facility) and Fixed deposit account. Current account is not generally opened for such persons. Withdrawals are permitted from the account on production of the passbook after verification of the thumb impression and proper identification of the account holder.
Nomination in Deposit Accounts
A valid nomination is required in the event of the death of the sole depositor or all depositors, the amount lying in the account will be returned to the nominee without any further legal formality.
Closing a deposit account upon customer’s request
A customer is entitled to terminate the relationship with a bank by applying for closing the deposit account if account holder is not satisfied with the services of the bank or for any other reason e.g. transfer to another place.
Closure of Deposit Accounts by bank
A banker may close an account or stop operation on a customer’s deposit account by giving reasonable notice to the customer, in any of the following cases:
- An Account may be closed on receipt of notice of death
- A joint account may also be closed on the death of any one of the account holders and fresh account opened in the names of the surviving account holders, to avoid legal problems.
Garnishee Order or Order of Courts
If a bank is served with a prohibitory order in execution of a decree of a court, a garnishee order, or by Income Tax authority, the bank would immediately note a "caution" in the account and stop payment of cheque or debits to the account, until the order is lifted in writing by the court or Income Tax department. The customer will at the same time be advised of such an order and the freeze on the withdrawals from the account that would follow the account operations are ‘stopped’ for temporary period of the court order.
