Types of Deposit Accounts in Banking: JAIIB PPB Module A Chapter 4 Complete

Every banker faces one question on day one at the counter:. Type of deposit account does this customer actually need? Open the wrong one and you invite compliance trouble.

KYC gaps and even frozen funds. This 2026 guide to the types of deposit accounts in banking decodes JAIIB PPB Module A Chapter 4 in plain English. So you score marks and serve customers with total confidence.

It maps cleanly to the IIBF syllabus for Principles &. Practices of Banking (PPB). You will learn how individual.

Joint, trust, cooperative, company and government accounts differ. You will also master the documentation. KYC and RBI rules examiners love to test.

What Is a Deposit Account? The Foundation of Banking

A deposit account is a contract where a customer places money with a bank for safekeeping. Returns or transactions. The bank becomes a debtor; the customer becomes a creditor. This banker-customer relationship is the bedrock of PPB Module A.

Deposits fund the bank's lending engine. They also decide its liquidity and stability. That is why correct account classification matters far beyond the exam hall.

Broadly, deposits fall into two families. Demand deposits are payable on demand, like savings and current accounts. Time deposits are locked for a fixed tenure. Like fixed deposits (FDs) and recurring deposits (RDs).

The Main Types of Deposit Accounts

The types of deposit accounts are best understood by who owns. Operates them. Ownership decides the documents, the mandate and the operating rules. Let us walk through each category the way a branch actually handles it.

1. Individual Accounts

An individual account is opened and operated by a single person. It needs standard KYC — proof of identity. Proof of address and a photograph. It is the simplest account a branch opens.

The account holder gives the operating mandate. On death, the balance passes to a nominee or legal heirs. Nomination is strongly advised at account opening.

2. Joint Accounts

A joint account has two or more holders. Every holder must complete KYC and sign the account-opening form. The operating mandate decides who can transact.

Common mandates include:

• Either or Survivor: any one holder operates. The survivor continues after a death.
• Former or Survivor: only the first-named holder operates while alive.
• Jointly: all holders must sign together.
• Jointly or Survivor: all sign together; survivors continue on a death.

Picking the wrong mandate is a classic branch error. Always confirm intent in writing.

3. Minor Accounts

A minor account serves a person below 18 years. It is usually operated by a natural or legal guardian. As per RBI guidance. Minors can also independently operate accounts within bank-set limits once they reach the prescribed age.

Banks add safeguards so the account is never overdrawn. The exact age and limits can change. So confirm on the latest official IIBF notification and RBI circular.

4. Partnership and Firm Accounts

A partnership account needs the partnership deed. A declaration from all partners. The mandate lists who can operate on the firm's behalf. KYC is required for each operating partner.

On retirement or death of a partner. The bank stops operations until a fresh mandate arrives. This protects the firm and the bank alike.

5. Company and LLP Accounts

A company account is more document-heavy. Banks collect the certificate of incorporation. The Memorandum and Articles of Association. And a certified board resolution naming authorised signatories. KYC of directors and signatories is mandatory.

A Limited Liability Partnership (LLP) account needs the LLP agreement. Incorporation certificate. The operating authority again flows from a formal resolution.

Special Deposit Accounts You Must Know

Some accounts exist for very specific legal or institutional purposes. Examiners love these because the documentation is unique. Treat each as a small case study.

Trust Accounts: Author, Trustee and Beneficiary

A trust account is governed by a trust deed. A legal document that defines how the trust runs. Think of it like a family recipe with strict. Written instructions that cannot be improvised.

Three roles drive every trust:

• Author (Settlor): the person who creates the trust.
• Trustee: the person who manages the trust funds.
• Beneficiary: the person who receives the benefit.

The bank keeps a certified copy of the trust deed plus full KYC. Trustees cannot use trust funds for personal benefit. Any breach can trigger legal liability.

Executor and Administrator Accounts

These accounts appear during succession, often after an account holder's death. An executor is named in a will and acts under a probate. An administrator is appointed by a court through a letter of administration when there is no executor.

The bank verifies the probate or the letter of administration before allowing operations. This keeps the deceased's funds protected and correctly distributed.

Cooperative Society Accounts

A cooperative society account serves a group with shared goals. Such as farmers pooling resources. It is governed by the society's bylaws and a managing-committee resolution. Transparent, rule-based operation is essential here.

Government and Public Body Accounts

Government accounts follow stricter rules than commercial accounts. Central government accounts follow central treasury rules. State government accounts follow state-specific financial handbooks. Public-body accounts often carry multiple layers of oversight.

Receipts and payments are recorded and validated step by step. It works like a large public event where every rupee in. Out is logged and verified.

Deposit Account Comparison Table

Use this quick-facts table as a last-minute revision sheet. It links each account type to its key documents and operating logic. Bookmark it before the PPB exam.

Current Account Operations and RBI Norms

A current account is built for high-volume business transactions. It usually pays no interest and allows unlimited operations. It often pairs with borrowing facilities like cash credit (CC). Overdraft (OD).

The RBI tightened current-account rules to protect credit discipline. The core idea is simple. A borrower's current account should sit where its banking-system exposure is meaningful. So funds are not diverted away from lending banks.

Key operating principles include:

• Exposure linkage: eligibility to open a current account depends on the borrower's share of banking-system exposure.
• Collection accounts: non-lending banks may keep collection-only accounts in defined cases. Routing funds back to the lending bank.
• Periodic monitoring: banks review exposure regularly. Typically on a half-yearly basis, and adjust account status.

These thresholds and timelines are periodically revised. Always confirm exact percentages. Review cycles on the latest official RBI circular and IIBF notification.

KYC, LEI and Specialised Accounts

Modern banking runs on data integrity. Strong Know Your Customer (KYC) is the first defence against fraud. Money laundering. Banks capture photographs, verify identity and keep records current.

For larger entities, the Legal Entity Identifier (LEI) adds global transparency. It is a unique 20-character alphanumeric code that identifies a legal entity worldwide. It helps banks:

• Improve data quality across systems and reports.
• Strengthen risk management for high-value transactions.
• Streamline global compliance for cross-border dealings.

Specialised accounts exist for narrow purposes. Such as project, escrow, tax-payment or settlement accounts. Each has a documented purpose that restricts its use. The goal is to prevent fund siphoning and keep credit discipline intact.

How to Study This Chapter and Score Marks

This chapter rewards structured revision, not rote reading. Treat each account type as a mini-template of owner, document and mandate. That pattern unlocks most PPB questions.

Follow this simple study plan:

1. Build a one-page grid of account types versus documents. Like the table above.
2. Memorise the three trust roles — author, trustee, beneficiary — and the trust deed.
3. Link probate to executor and letter of administration to administrator.
4. Summarise current-account RBI logic in one line: exposure decides eligibility.
5. Drill with timed mock tests and revisit weak areas using our free guides.

Spaced repetition beats last-night cramming. Revise this grid three times before exam week.

Common Mistakes Students Make

Small errors cost easy marks in PPB. Avoid these frequent traps spotted in mock tests and the branch alike.

• Confusing mandates: mixing up Either or Survivor with Former or Survivor.
• Ignoring documents: forgetting the board resolution for company accounts.
• Swapping roles: reversing executor (probate) and administrator (letter of administration).
• Overlooking RBI logic: treating current accounts like ordinary savings accounts.
• Memorising stale figures: quoting old thresholds instead of confirming the latest official IIBF notification.

Fix these five and your accuracy jumps immediately.

Frequently Asked Questions

What are the main types of deposit accounts in banking?

The main types of deposit accounts are individual. Joint, minor, partnership, company or LLP, trust, cooperative society and government accounts. They split broadly into demand deposits. Like savings and current, and time deposits, like FDs and RDs.

What documents are needed to open a trust account?

A trust account needs a certified copy of the trust deed. Full KYC of the trustees. The deed defines the author, trustee and beneficiary roles. Banks verify these before allowing any operations.

What is the difference between an executor and an administrator account?

An executor is named in a will and acts under a probate. An administrator is appointed by a court via a letter of administration when no executor exists. Both require court-backed proof before operation.

Why did RBI tighten current account rules?

RBI tightened current-account norms to strengthen credit discipline and stop fund diversion. Eligibility to open a current account is linked to the borrower's banking-system exposure. Confirm exact thresholds on the latest official RBI circular.

Is the LEI mandatory for all account holders?

The Legal Entity Identifier (LEI) mainly applies to entities and large-value transactions. Not every individual saver. It is a unique 20-character code that aids global transparency. Confirm current applicability thresholds on the latest official IIBF notification. RBI guidance.

Conclusion: Turn Account Rules Into Exam Marks

The types of deposit accounts in JAIIB PPB Module A look vast. But the logic is tidy. Identify the owner, gather the right documents, and apply the correct mandate. Do that. Both your exam answers and your branch work become effortless.

You now understand individual, joint, trust, cooperative, company and government accounts. You also grasp KYC, LEI and the RBI current-account framework. That is a genuine edge over most candidates.

Keep the comparison table handy. Drill with timed practice. And revise the trust and succession rules until they feel automatic. Show up prepared, stay calm and trust your preparation. You are closer to clearing JAIIB than you think.

Related Guides

For more on types of deposit accounts. See the official IIBF circulars. Our chapter-wise free notes on iibf.store.

For more on “types of deposit accounts”, explore our free mock tests and chapter notes on iibf.store.

Bookmark this page — we keep our “types of deposit accounts” guidance current as IIBF revises its rules.