As the name suggests, it is meant for saving. The amount you save can play a very important role in emergencies. Therefore, a savings account serves the simple purpose of letting a user store and save money while earning interest on the amount deposited. It is the most basic type of bank account where transactions are simple.
A person can either open an account by visiting a bank or opt for an online saving account opening Process.
With numerous banks providing various savings accounts, it becomes a task to identify the best bank for digital savings accounts for you and which type of account would be perfect for your investment. However, here are some common features and benefits that most banks offer when opening a savings account.
Features of a Savings Account
1. Easy Financial Transactions
A savings account’s primary objective is to satisfy the purpose of depositing and withdrawing money. Financial transactions are done mainly through a savings account to send and receive money. These transactions can be done swiftly through net banking services such as IMPS/RTGS/NEFT facilities or physically using an ATM debit card, cheque or cash withdrawal slip. The bank determines how many times and how much a person can withdraw at a time.
2. Interest rates
An interest rate is a percentage earned on the amount you have kept in your account. These interest rates differ from bank to bank and depend on RBI’s banking policies, repo rates and reverse repo rates.
3. Minimum balance requirement
Most banks have a minimum balance requirement, which needs to be maintained by all savings account holders. Users who fail to uphold the minimum balance will have to pay a maintenance charge. However, some savings accounts, like zero savings or salary savings accounts, do not have to maintain a minimum balance.
4. ATM facility
The savings account welcome kit usually comes with an ATM debit card. You can easily withdraw money from any ATM, make payments at retail stores and use the same credentials for online payment. In addition, digital savings accounts offer virtual debit cards.
5. Passbook and chequebook facility
When opening a savings account, you will probably be provided with a passbook and a chequebook as part of the kit. A chequebook is used for quick withdrawal or depositing money, and a passbook keeps track of all your financial transactions and activities.
6. Savings accounts for all age groups
A savings account has no restriction on the account holder’s age. Different types of savings accounts cater to people of all age categories. The eligibility criteria determine whether an account can be opened for a child, an adult, or a senior citizen. These accounts have their own set of advantages beneficial for each category.
7. Internet Banking
After an online saving account opening, online transactions are made easier by using internet banking facilities. Everything can be done online without visiting the bank physically, from receiving the money to online shopping, paying bills and investing money.
Benefits of a savings bank account
- Unlimited transactions: Account holders can withdraw or deposit money as often as they need due to high liquidity.
- Safety: Unlike other investments, a saving account is a safer place to keep your money. It is one of the least affected products by market volatility. All accounts are insured by the Deposit Insurance and Credit Guarantee Corporation for up to Rs. 1 lakh.
- Special Benefit for Senior Citizens: Senior citizens can get an additional interest rate of 0.5% above regular interest rates in various banks.
- Convenient Investment: Savings accounts can be linked to other investments, such as a Demat account, fixed deposit, etc., for ease of investment.
- Quick and Safe Transactions: Carrying out fund transfers using UPI, RTGS, IMPS, or NEFT becomes easy through mobile banking, net banking, or by directly visiting the bank itself.
- Choice of Interest Type: The account holders can opt for monthly, quarterly, semi-annually or annual interest payments.
- Special Offers: Savings account holders are usually eligible for special deals and discounts on various savings accounts and debit cards.
A savings account provides a safe space to deposit funds, helps keep track of money and makes financial transactions easy and convenient. As a result, managing and maintaining finances becomes hassle-free; therefore, a savings account becomes a good first step in taking control of one’s finances.