Savings Account

As a salaried or self-employed individual, you may need a secure financial option to store excess funds. This is where a savings account comes into play. A savings account will allows to store your money with a financial institution and access it as needed.

 

This will not only just keep your money secure but earn interest on the balance maintained. Though the returns are minimal, the key benefit is in the liquidity you enjoy.

Savings account allow you to liquidate your savings in the following ways:

• Paying another account holder using a cheque

• Withdrawing cash at an ATM

• Making online and offline payments using your debit card

• Approving bank transfers through NEFT/IMPS/RTGS

If you decide to open a savings account, you get to enjoy the following benefits:

• High Liquidity

It offers a great deal of liquidity, meaning you can withdraw your funds anytime.

• Security

The financial institution you choose takes responsibility for your money, and the money you deposit is safe and secure. Banks also insure the funds that you deposit in a savings account up to Rs. 5 Lakhs.

• Additional Earnings

Most banks offer interest rates ranging from 3.5% to 6% on the account balance. This translates into additional earnings, over your other investments and income.

• Easy Fund Transfers

Account Holders can transfer funds easily to another party using different online methods like NEFT, RTGS, or IMPS.

• Joint Account Holding

They also come with a facility to open accounts in joint ownership with at most 3 parties. A joint savings account is ideal for managing your household income and savings.

• Add-on Facilities

A savings account also comes with different add-on facilities that you can avail of for greater benefits. For instance, the sweep-in facility allows you to convert additional funds into a fixed deposit and earn higher interest.

• Ease of Payments

A savings account also makes it easy for you to pay your utility bills and investments. For instance, the automatic debit facility deducts the amount of bill payment or your SIP when it is due.

Here are details about the types of savings accounts you can choose from:

• Regular Savings Account

It is the simplest and most common type of savings account where you can store your funds to earn interest.

• Instant Savings Account

An instant savings account performs all the similar functions as a regular savings account. The only difference is that you can open this account online, almost instantly.

• Privilege Savings Account

This type comes with exclusive offers for the account holders. These may include unlimited cash withdrawals, discounts on bank locker facilities, etc.

• Women’s Savings Account

These accounts are specially designed to cater to the needs of women. These accounts also offer value-added benefits to the account holders.

• Minor’s Savings Account

Parents/guardians can open these accounts for their children and inculcate in them a habit of saving.

• Family Savings Account

A family savings account is designed to help you manage household expenses and savings. Such an account can be jointly held by 3 members of a family.

• Salary Account

As its name suggests, a salary account is where you receive your monthly income from the employer.

• Zero Balance Account

Zero balance savings accounts do not have any minimum balance requirement.

The eligibility criteria to apply for a savings account differs based on the bank that you choose.

Generally, in order to be eligible to apply for a savings account, you need to fulfil the following basic requirements:

• The applicant must be a resident of India

• The applicant must be at least 18 years of age

• Parents/guardians can open a savings account in their child’s name

• Identity Proof: Aadhar card, PAN card, Driver’s Licence, Passport, or Voter’s ID

• Address Proof: Aadhar card, Driver’s Licence, Passport, or Voter’s ID

• Income Proof: PAN Card or Form No. 60

• Two photographs with a filled-out application form

The following table shows the interest rates offered by different banks on a savings account. Compare these rates to choose a financial entity that offers the most competitive interest rates:

Disclaimer: Interest rates mentioned are subject to change as per the issuer’s policies.