What is a Savings Account?
A Savings Account is a virtual vault that a bank opens for you where you can store a virtualized representation of your cash. What this means is that basically you can give your physical cash to the bank and they add this amount to your account. Further you can use this money for various purposes like paying bills, transferring it to other people’s accounts, shopping and other activities.
A bank gives you a certain amount if interest on the balance in the account and hence unlike physical money that you may have lying around in the cupboard, putting it into the bank will reward you over time by building the capital and making you even more money.
What are the features of a Savings Account?
Savings Accounts are useful for salaried people who want some measure of liquidity while still earning interest on their savings. The main features of savings accounts are:
- Savings Bank Account give you, the account holder, a certain rate of interest on the balance amount you maintain in the account. This allows your money to passively generate a small source of income for you without any extra effort on your part.
- Depending on the type of savings account that you select, your bank may have a minimum quarterly average balance requirement that must be satisfied each quarter. In case this is not maintained, the bank reserves the right to charge you a fee for the non maintenance of the balance.
- Banks today offer you a handy web portal and mobile apps that allow you to control the funds in your account and do things like pay your utility bills, transfer funds to different accounts, invest in other schemes and much more from your mobile devices themselves.
- Savings accounts usually have an upper withdrawal limit that allow you to only withdraw money upto a certain amount each day.
What are the types of Savings Accounts?
There are various different types of savings accounts provided by banks that are tailored to suit certain types of customers. So you have a wide variety of the options available to you and can choose the one that you feel makes the most sense to you.
- The most common type is the Regular Savings Account, which is basically a no frills account that is opened with just the most basic features that a bank provides. It usually has a minimal number of free transactions that you can perform on it like ATM withdrawals, branch deposits and withdrawals and so on. Going beyond the free limits for these transactions attracts charges on each transaction and so these are not ideal for people who use a lot of such services from their bank. Each bank has different rules and limits for their accounts and it makes sense to compare the facilities they offer before choosing which bank to open an account with.
- A lot of companies open a salary account for their employees and so banks offer such companies the option of opening a Salary based Savings Account for their employees. The rates of interest and other facilities like ATM withdrawal limits, free Credit cards and so on, on these types of accounts are a lot better than the ones available to regular savings accounts and the regular crediting of money into these accounts helps build a good credit rating assuming you do not create too many liabilities and debts.
- To help and encourage economically weaker sections of society to start banking, banks started zero balance savings accounts for such customers. Zero Balance Accounts do not have the minimum quarterly balance requirements that are applicable in the case of normal savings accounts and are a sort of compromise between the current and savings accounts. However be advised that such accounts have very few free transactions like ATM withdrawals and cash withdrawals per month, after which a charge is applied by the bank for subsequent transactions. These accounts are very useful for people who do not have a high volume of usage and do not require all the amenities provided by banks for normal saving accounts.
- Banks offer Senior Citizens special savings accounts that are specifically designed to help make management of their funds easy and hassle free. These accounts are usually characterized by a higher rate of interest, that allows senior citizens to live comfortably. Moreover they also have options to be linked to other schemes and pension funds, which allows management of all the funds from a single easy to use account.
- Children Savings Accounts are another special type of savings accounts that are targeted towards the younger generation of today. These accounts are overseen by a parent or a guardian and allow the children to operate it to gain some insight into the way a bank account is operated and how to handle finances in a controlled way.
- Many banks today are offering Women Special benefits on opening a Savings account with them. These schemes are primarily designed with the explicit purpose of helping women gain financial independence and help them achieve their potential. Female entrepreneurs and working women who sign up for these accounts are often given loans at attractive terms and have better interest schemes along with a host of other benefits.
- Some banks offer a Linked Savings Account that allows you to link your savings account to another checking account. This allows you to freely move funds between accounts as you require and provides the benefits of both types of accounts in a single package. Customers can enjoy the higher rate of interest offered to savings accounts on the balance in the savings account while simultaneously avail the benefits of the checking account like low service charges and high withdrawal limits on the money in the linked checking account.
What do I need to do to be eligible for opening a Savings Account?
There are a few things that are necessary to be eligible to open and operate a Savings Account in any bank. The following list covers the most general set of requirements necessary for being eligible in a majority of banks in India. However some banks may have additional criteria that need to be satisfied, depending on the bank and the type of account that you wish to open.
- You need to be a citizen of India or an NRI (Non Resident Indian) to be eligible to own and operate a Savings account in an Indian Bank.
- You need to be over the age of 18 to open your own account. Certain types of accounts can be opened in the name of minors by their guardians or parents, depending on the type of account.
- Unlike most other banking instruments, savings accounts have minimal requirements in terms of eligibility.
What Documents do I need to open a Savings Account?
Most banks will require the following documents to open a Savings account with them. Along with these documents, certain types of accounts will also require additional proof like age proof and income proof in certain cases. It is always advised that you confirm with your bank to get the full set of required documents to ensure that you do not undergo unnecessary hassles.
- Proof of identity will be required to verify your identity, and this can be any kind of government issued document with valid photo identity like your passport, drivers license, PAN card etc.
- Proof of age is also required in case you are applying for a senior citizen’s account or a minor account.
- Passport sized photographs will also be asked for along with the application form.
- Proof of address is also asked for and must match the address filled in the application form. Again this can be any form of government issued document with the applicant’s address filled in.
Why choose BankingOnTips for selecting my Savings Account?
There are so many choices in the types of savings accounts between banks and even in the types of accounts offered by each bank that finding the one that best suits your needs is a difficult task for anyone. We at BankingOnTips try to simplify the process of finding the perfect account by giving you a one stop place to compare the various schemes and benefits offered in saving account schemes across a variety of banks and choose the one that suits your needs the best.