Savings bank accounts or better known as savings accounts are the most widely used and common type of bank accounts across the globe. It is a kind of window to understand and estimate one’s virtual wealth.
In today’s world and in the years to come, plastic money will play an important role in terms of how we manage the funds and to a great level with the birth of digitalization, banks have really transformed the way customer money is being managed.The savings account opening process is the simplest of all, all it takes is to walk to your desired bank branch and explain them your position or requirement and post understanding and discussion, a bank may offer you savings account opening.
Why to go for savings account?
There are some basic characteristics of savings bank accounts that stand out from other types of bank accounts:
- Savings accounts have daily withdrawal limit, the idea is to not to use savings account as
- Savings accounts are generally not-zero balance accounts.
- Most of the banks expect a customer to maintain a minimum account balance. if, a customer does not maintain minimum balance in the account, the bank holds the right to charge non-maintenance charges.
- There is no restriction as such as to who all can open this account. So, Individual, two or more persons in a joint account, differently abled people, blind people, illiterate people, even a minor, clubs or societies and trusts would qualify to open bank account.
- Savings account offer interest rates which are slightly higher than the inflation that ensures money is stable throughout the years.
Ultimately, it is a unit that stores your money in an secured environment and in-lieu charges nominal fee. It also allows you to withdraw certain level on your money in some interval and keeps adding interest to your amount.
Types of saving accounts
Indicated below are the categories of savings account: -
As reinstated in the earlier details, the savings account is the easiest to open out of wide spectrum of accounts and entails basic terms and conditions. From account operating perspective, it is a type of account which does not see frequent transaction i.e. withdrawal or deposit. One can imagine it to be virtual safe, where money is lying in the safe environment and it’s Movement is governed by the individual account holder. Normally, individuals have this view and often seen as the trend, savings account is meant to cater exigency situations.
Salary centred savings account
In order to cater to the corporates and big size companies, banks offer salary dispersal system. Since, these have big employee strength, banks offer them better rates and specific terms and customized service solutions. Please note these accounts are handled individually by each of the employees. When the dispersal date nears, bank withdraws the money from company’s account and deposits it into each individual employee’s company account. Normally, accounts that have consistent dispersal of money, deem to earn favour by credit rating agencies, thus enabling better credit score. As part of the service indicated above, many banks operate on zero balance policy, thus do not have a minimum balance requirement.But once an employee leaves the organization and joins an organization which does not have a tie-up with the bank where the salary is being transferred.Attracts service charges or minimum balance guarantee.
Zero balance account mixes the better features of savings and current account. Though, they have levied the daily withdrawal limits on how much one can withdraw the money, customer really does not have to worry if, the balance in the account drops below the conditional limit. In cases where employees shift jobs and their existing employer does not have bank account with the bank where this individual’s salary was being credited, the account gets converted into regular savings account.As and when the salary drops below the limit, a penalty or maintenance fee is deducted from the account. Well, one really does not have to bother about penalty clause in zero balance account. Zero balance accounts serves ideally for the people who are not financially sound. But, given the surge and advantages it brings on to the table for both bank and customer, they have started offering services to general people, primarily due to their utility.
Children and minor
Seemingly, an initiative by the bank to educate the young generation or minor, managing this sort of account is pretty much similar to managing a conventional savings account. As the name suggests children and minor savings account, are opened for children by their parents or legal guardians and the account operating is monitored and counselled. With regular touch with the banks, the minors gets the understanding of banking nitty-gritties and sense of responsibility and in the process start to value money. This program is yielding more than anticipated results and helped banks penetrate the banking know how at the grass root level.
As the name indicates that this account is created for elderly people, offers the special benefits for people or individuals who fall under this aforesaid category. Account operating is done in the similar fashion as one would do while operating regular savings accounts, but with some differentiating factors such as higher rates of interest (ROI) and special banking privileges. Since, these account come with some tailor made facilities for senior citizens, one of the key thing is, it can be mapped to other senior citizen savings offering to disperse the amount from retirement accounts or pension funds to compile all the sources of funds under one single bank account which is easily manageable by the senior citizens.
What are the documents required to open savings account?
One has to compile and submit the document in order to open a savings account: -
Photographs: Normally, banks ask to submit 2 color passport size photographs from the applicant.
Age proof: Any document issued by the government of India entailing full name, address, date of birth and photograph qualifies as an authentic proof of age. Some of the examples of age proof could be aadhar card, driving license, voter id, passport and ultimately pan card. Please note, in case of a minor, banks accept 10th certificate too as an age proof.
Income proof: This is applicable especially for people who are running their own business and to a individuals who may not be into full time job. Only exception here is the account which is open by the big company.
Senior Citizen Card: Carries two level of details: -
- Senior citizen card
- Proof of age
How much interest can one expect after opening savings account?
Interest rate is subjective in nature and varies from banks to banks and the rates can start from 4% per annum and may go up to little over7%. However, the interest rate may vary depending on the type of savings account; one can expect to earn the interest on quarterly, half-yearly, yearly and shorter intervals.
How do I know what is my average monthly balance?
Average monthly balance is governed by the amount i.e. salary which is being transferred into individual account at the starting of the month and each month. In a situation when a customer is not able to maintain balance in the account which is proportionate to the amount transferred each month or an individual fails to maintain average balance, it may attract non-maintenance charges.
What is nomination in nexus to savings account? Whom can I nominate?
Security and seamless dispersal of wealth is what banking industry looks for. So, in wake of unfortunate event of death, the person chosen by you as nominee gets the entire wealth accumulated over a period. Please be aware that only one person per account can be nominated. An ideal nominee can come from immediate family, relatives, friend or any trusted person who is an adult.
What are the means to access one’s saving account?
With birth of digital arena, majority of the banks offer customers the flexibility to access their savings account via various options like physical access i.e. physically operating account at the various bank branches, bank website, phone, mobile banking and ATMs. Is it advantageous to enable an online banking?
Absolutely. By enabling internet banking customer gets 24X7 access to banking ecosystem that too at comfort of their choice, one can make use of this facility and drive great value of this services for example: spending analysis, transfer funds bank statement, balance enquiry, update eKYC, order chequebook and various promotional activities run by the bank.
Savings bank comparative for your ready reference, please note that these rates are changed by banks as per market trends
|Interest rates chart|
|Savings Account||Rate of interest|
|RBL Bank||7.1% p.a = Daily balance above Rs.10 lakhs
6.1% p.a = Daily balance above Rs.1 lakh
5.1% p.a = Daily balance upto Rs.1 lakh
|Kotak Mahindra Bank||6% p.a|
|Lakshmi Vilas Bank||5% p.a = Daily Balance Upto Rs.5 lakh
6% p.a = Above Rs.5 lakh
4% p.a = Daily balance upto Rs.1 lakh
|IndusInd Bank||4% p.a = Daily balance upto Rs.1 lakh
5% p.a = Daily balance above Rs.1 lakh but less than Rs.10 lakhs
6% p.a = Daily balance above Rs.10 lakhs
4% p.a = Non-resident NRO and NRE accounts
|Bandhan Bank||4.25% p.a = Daily balance upto Rs.1 lakh. Interest paid half yearly.
5% p.a = Daily balance above Rs.1 lakh. Interest paid half yearly.
|HDFC Bank||4% p.a = Effective from December 1, 2015|
|Axis Bank||4% p.a (applies for all amounts)|