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Introduction to Banking

Mistakes To Avoid While Opening A Bank Account

Now that we know what things are required to open a bank account. Let us discuss a few common mistakes that one should avoid while opening a bank account. 


Admit it, most people often take account opening too lightly and end up making mistakes which turn out to be harmful in the long run. Here are a few guidelines that one should follow:

  • Customers should always provide an authentic document while opening a bank account. The bank conducts due diligence from time to time. If any document is found to be forged, the bank can freeze the account, in which case the money in the account will become unusable.
  • Customers should ensure the name in the account matches the customer's original name. A difference of even a letter can be harmful. 
  • Often the bank representative volunteers to fill up the account opening forms. Customers should always check the filled out form before final submission and ensure all the information provided is correct. 
  • Customers should never sign a blank document. 

Operating a Bank Account

While operating a bank account is easy, a few things need to be kept in mind:

  • Most banks require customers to maintain a minimum/average balance in the account. If this is not maintained, a charge is deducted. 
  • Customers can deposit money in their account either at the branch or at cash deposit machines.
  • Money can be withdrawn from the account through ATM machines or through bank branches. 
  • Customers can transfer money to other persons using cheque or through online transfer modes such as NEFT, IMPS, RTGS, etc. 
  • Online Banking is the most convenient way to operate a bank account. It is like a mini-branch available online where customers can perform almost all transactions. 
  • The bank provides a statement of account or bank passbook updated at regular intervals. This helps customers to keep a track of the transactions in the account.

 

Different Options for Operating a Bank Account:

'Mode of operation' is a term commonly used with regard to bank accounts. It refers to how a bank account is operated. As mentioned earlier, any account can be opened by an individual alone or together with two or more individuals. When there is more than one account holder, customers can choose different kinds of modes of operation such as single, either or survivor and jointly. When there are two holders in an account and any one of the holders can perform financial transactions in an account independently, then the mode of operation is known as 'Either or Survivor'. In case there are more than two holders, this mode of operation is called 'Anyone or Survivor'. Customers can also stipulate a clause where unless two holders sign together, a transaction cannot be carried out in the account. This mode of operation is known as 'Jointly'. 

 

Traditionally, bank accounts were operated from the bank branches. However, with the advent of digital technology, things have become easier. People can operate their bank accounts anywhere anytime using their computer or mobile. However, to do so, it is imperative to sign up for internet banking and mobile banking facilities. We will discuss more on internet banking services offered by the banks in the upcoming section of this module, but before that, let us learn how to select a suitable bank account as per our needs in the next unit. 

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