Savings account

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Savings account

A savings account is a type of account that is opened at a bank or other financial institution that earns a moderate interest on the balance maintained. A savings account is essentially opened to put aside money that is not required immediately. Banks place restrictions on the number of withdrawals that can be made from the account each month. The interest rates earned on a savings account are determined based on the minimum average balance maintained in the account. The rate of interest offered on the balance in a savings account varies from bank to bank.

Why Open a Savings Account?

Savings accounts, as the name suggests, is a great way to save funds for the future. Excess funds can be kept aside and used when necessary. Here are a few reasons why opening a savings bank account is a good option:

  • Savings bank accounts offer an interest rate slightly higher than the rate of inflation, in order to keep the real value of money stable throughout the years..
  • Modern savings accounts are feature packed and offer quick links to pay bills, make quick transactions, etc. to the account holder as soon as he / she logs in to the account.
  • Holding a savings account helps improve financial stability since the funds in the account have limits on the number of withdrawals made against the account.
  • Banks customize savings accounts depending on the general type of usage the account witnesses in its lifetime.

    Modern savings accounts are feature packed and offer quick links to pay bills, make quick transactions, etc. to the account holder as soon as he / she logs in to the account.

  • How to Open a Savings Account Offline?

    While most bank related work happens online these days, some trips to the bank are absolutely unavoidable. In case you’re stuck without a portal through which to create a bank account online, you can follow these steps to open a savings bank account offline:

  • Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.
  • Step 2: Take a copy of your identity proof, two photographs, address proof, income / employment proof (if necessary), and age proof and head to the nearest branch of the bank in which you wish to create an account.
  • Step 3: Once at the bank, tell the clerk you wish to open a savings bank account, and he or she will hand you an account opening form.
  • Step 4: Fill out the form as required, and submit the same along with the copies of your identity proof, photographs, address proof, income / employment proof (if required), and age proof to the clerk.
  • Step 5: The clerk will then submit the application for processing and, depending on which bank you’ve chosen, your account will be opened and functional in any time between 1 and 12 working days.
  • How to Open a Savings Bank Account Online?

    The simplest way to conduct banking operations is online, and opening a savings bank account is a very simple procedure:

  • Step 1: Research different banks and their interest rates, find the one that best matches your specific requirements, if any, and the type of bank account you wish to open.
  • Step 2: Log on to the website of the bank in which you wish to open your account. Note that not all banks have online account creation facilities.
  • Step 3: Fill out the online application form for the savings account that meets your needs and submit it along with a digital copy of identity proof, photographs, address proof, income / employment proof (if required), and age proof. Some banks may require you to submit physical copies of your documents for which they will send over an executive.
  • Step 4: Your details will be verified by the bank’s back-end team, and you will be able to start using your account almost instantly.
  • Savings Bank Account Eligibility

    The following are the eligibility criteria for opening a savings bank account:

  • Eligibility criteria

  • 1.Resident Individuals
    2.Foreign nationals residing in India
    3.Non-Resident Indians
  • Age
  • 18 years
    Banks also offer minor accounts that are jointly operated with a parent or guardian.

    Documents Required to Open a Savings Bank Account

    When customers decide to open a savings account, the bank requires the customer to submit certain documents. They are as follows:

  • Proof of age and identity:Any authentic, registered, and recognized document issued by a competent authority, that contains the full name and a recent photograph of the applicant can be used.PAN, Voter ID, Passport, and Driving license are some examples of the documents that are accepted by banks when applying for a savings account.
  • Photographs: Most banks require that customers submit at least 2 passport-sized photographs along with their application.
  • Proof of address: Any authentic, registered, and recognized issued by a competent authority, which contains the address of the applicant can be used. Customers should keep either a Driving license, Voter’s ID, Passport, Utility bill are among some of the documents that can be submitted to the bank.
  • Senior Citizen Card: Almost all banks offer Senior Citizen savings accounts to their customers. Applicants who wish to open a senior citizen’s account are required to submit proof of their age. A senior citizen card is issued by the Social Welfare Department and is the document that is most preferred as proof.

  • Features and Benefits of Savings Account

    Here are some of the features and benefits of a savings bank account:

  • As the name suggests, a savings bank account is a safe place to store surplus funds. It helps build a nest egg for the unexpected situations that may arise in the future.
  • The balance in a savings account earns interest. While the rate of interest might not be as high as other bank deposits, since the funds are not withdrawn on a regular basis, it continues to increase the funds in the account.
  • All savings account, whether held at a nationalised bank or any other financial institution, is always safe.
  • A savings account provides account holders some level of liquidity. Banks usually provide account holders with debit/ATM cards that can be used to make a certain number of withdrawals from their savings account.
  • An advantage for most savings account holders is that banks usually offer discounts on the locker rental facilities for customers who maintain the minimum quarterly balance.
  • Most banks also provide savings account holders with various insurance covers including personal accidents and death.

  • Types of Savings Accounts

    Banks offer customers a variety of savings accounts that differ in terms of its balance requirements and features. The following are some of the types of savings accounts offered by most banks:

    Regular Savings Account

    These are opened on the bank’s most basic terms and conditions. These accounts don’t see regular deposits of consistent amounts, nor do they see regular withdrawals. These are primarily the virtual equivalent of a safe where the money just sits waiting to be used by the account holder. These facilitate the most common form of virtual savings that aren’t touched, unless absolutely necessary.

    Salary Based Savings Account

    These most often opened by banks on the request of large companies that require a payment disbursal solution. Banks offer companies preferential rates and specific terms for these accounts – which will be individually handled by each of the latter’s employees. At the date of payment disbursal, the bank withdraws from the company account and disburses the required amount among the salary based savings accounts opened for the employees. It should be noted that most salary accounts do not have a minimum balance requirement, but once the salary stops being credited (for whatever reason) for 3 consecutive months, these accounts are changed into regular savings accounts with a minimum balance requirement.

    Savings Accounts for Senior Citizens

    These accounts are created for senior citizens, with specific functionality and benefits for those in the senior citizen category. These function in the same way that regular savings accounts do, but generally offer higher rates of interest and exclusive banking privileges. They can be linked to other senior citizen savings schemes to remit the funds from retirement accounts or pension funds, and consolidate all the funds under one single bank account.

    Savings Accounts for Children and Minors

    These accounts don’t generally have a minimum balance requirement and function in the same way as regular savings accounts. These are designed to educate the younger generation about modern day banking facilities and the general nuances of managing a bank account. These accounts are opened for minors by their parents or legal guardians. These accounts are operated under the supervision of the legal guardian until the child is 10 years old. Once the minor has crossed the age of 10, they are permitted to operate their account independently. After the account holder is 18 years old, the account is converted to a regular savings account and has a minimum balance requirement.

    Zero Balance Savings Account

    This type of account merges the best features of a savings account and a current account. While there are still limits on withdrawal amounts, these accounts are not charged any penalties if the balance in the account falls below the prescribed minimum. Sometimes, in cases where employees shift jobs and have to create new salary accounts – their old salary account will transform into a regular savings account – and when the balance inevitably falls below the minimum, they are charged a penalty or maintenance fee. This does not happen with zero balance savings accounts. Usually, banks offer these accounts to applicants from lower economic backgrounds, but have started offering salary accounts as zero balance accounts due to their utility.

    Women’s Savings Account

    A number of banks have begun offering savings accounts that have been specifically designed for women. These accounts come with special features to benefit the account holder. These benefits include discounts on certain purchases, low interest rates on loans, and a waiver on demat account charges.

    Best Savings Accounts in India

    When opening a savings account, one of the most difficult decisions to make is choosing the right bank. The following are a list of some of the banks that offer attractive features on a savings account:

    SBI Savings Account

    State Bank of India savings accounts are among the most balanced – as there are SBI bank branches all over the place, and the rate of interest is always competitive. These accounts also have usability through the SBI website.

    ICICI Bank Savings Account

    ICICI Bank savings accounts may not offer the highest interest rate, but are almost unparalleled in terms of ease of use. The intuitive mobile app and online banking facilities with direct bill pay, etc. are excellent tools that can save time.

    HDFC Bank Savings Account

    HDFC Bank is one of the country's largest private sector banks. It has a number of variants of the savings account for its customers to choose from. Additionally, HDFC has among the largest ATM networks in cities, which makes it the ideal account for a certain type of account holder.

    Kotak Mahindra Bank

    Kotak Mahindra Bank has a number of savings accounts that it offers its customers. The newest variation of the savings account is the 811 account that has been gaining a lot of popularity. The account is a zero balance account and just takes a few minutes to open. Customers can upload the KYC documents to the bank website and the account is instantly activated.

    Axis Bank

    Axis Bank has a wide range of savings accounts that customers can choose from. All these savings accounts come with either a Visa or RuPay debit card, whose use earns the account holders a number of perks.

    Federal Bank

    Federal Bank has a type of savings account for almost every type of customer. All the savings accounts come equipped with features such as internet banking, e-statements, and online bill payments.

    Canara Bank

    Canara Bank is one of the country’s oldest and most trusted nationalised banks. While the bank still adheres to some traditional banking practices, it has also adapted to the technological advances in the industry. Additionally, the minimum balance requirement for the savings account is comparatively lower than other banks.

    Punjab National Bank

    Punjab National Bank has a wide range of savings accounts that have been designed keeping in mind the financial requirements of the prospective customer. The accounts offered range from retirement accounts to accounts for armed forces and student accounts.

    IndusInd Bank

    IndusInd customers have 13 variants of the savings account that they can choose from. Each type of account has exclusive benefits that can be availed by the account holder.