Guide to Savings Accounts and Account Opening in Indian Banks www.deekpay.com

Bank of IndiaOffering several types of bank accounts, savings accounts are one of the key bank accounts where individuals can deposit funds and earn substantial interest. These accounts provide users with a safe place to deposit their money and offer monthly, quarterly, semi-annual or annual interest.

Savings accounts are a financial instrument held by many banks where the account holder deposits money into the account and earns a modest interest on it. People prefer these accounts because they are easy to use, safe, secure and liquid. People can deposit money without restriction and withdraw it when needed.

Bank Savings Accounts in IndiaThe purpose is to provide a medium for people to deposit money they do not intend to use regularly in a safe place. Account holders can earn substantial interest on their account deposits at a pre-determined rate (which changes from time to time). The interest is paid monthly, quarterly, half-yearly or annually. The biggest benefit of a savings account is that one can withdraw the entire amount almost immediately and use it as and when required.

Features of Savings Accounts in Indian Banks

The main features of savings accounts are listed below:

The rates offered to the average customer range from 2.00% to 7.00%. The rates offered to elderly customers are 0.50% higher than the regular rates. Bank deposits up to Rs. 50 lakhs are insured by DICGC (Deposit Insurance and Credit Guarantee Corporation). High liquidity is ensured so that account holders can make multiple transfers or withdrawals. Allow account holders to link savings accounts to time deposits in the same bank. Provide savings account holders with an ATM or debit card for online payments or cash withdrawals. Allow users to withdraw money via UPI(Unified Payment Interface of India),NEFT(NEFT National Electronic Funds Transfer),RTGS(Real-time summary calculations),IMPS(Instant Payment Service), Internet Banking, Mobile Banking or in person at a branch for fund transfers. There is no limit to the amount that can be deposited. Allows users to operate their savings account banking, mobile banking, SMS banking, etc. via the internet. Account holders should comply with the Monthly Average Balance (MAB) requirement. Various discounts and offers are available on deposits in savings accounts and debit cards associated with them. Account holders can choose how interest is paid monthly, quarterly, semi-annually and annually.

Types of Savings Accounts in Indian Banks

The types of savings accounts are listed below:

Regular Savings Account: This is one of the most common and simplest savings accounts that can be opened after completing e-KYC (Know Your Customer) and earns interest on deposits. Some banks maintain a minimum balance and charge a minimum annual account maintenance fee. Zero Balance or Basic Savings Bank Deposit Accounts: These accounts do not have any restrictions on maintaining a minimum average monthly balance (MAB), and you can open and maintain this account even if you have not deposited any amount. While there is no MAB restriction, banks will limit the number of ATM withdrawals, not offer cheque book services and restrict the types of debit cards available. Senior Savings Accounts: These accounts are available to individuals over the age of 60 and provide them with special benefits such as additional interest rates, dedicated account managers, lower interest rates on credit, and more. Women's Savings Accounts: These accounts are designed for women and offer various benefits for women such as women-only debit cards, preferential loan and credit offers, locker discounts, free multi-city cheque books, unlimited ATM cash withdrawals, relaxed minimum balance requirements, etc. Children's Savings Accounts: Parents or guardians of children under the age of 18 can open these accounts by providing proof of identity and a statement from the parent or guardian. These savings accounts offer regulated deposit schemes with specified spending limits to inculcate self-disciplined financial behaviour in children from the very beginning. Instant Digital Savings Accounts: These accounts can be opened online through mobile phones or banking apps within seconds of completing the KYC process. If the account holder does not complete the KYC process within a specific period, the bank will retain the account. Some banks have set a maximum deposit limit of Rs 100,000 for these accounts. Salary Accounts: These accounts are available to salaried individuals who receive their monthly salary from these accounts. Some of the important features of these accounts include free cheque books, international debit cards, zero balance accounts, supplementary personal accident insurance, preferential loan rates, etc. Family Savings Accounts: These accounts allow family members to open multiple accounts under a single family ID and allow them to enjoy various benefits such as fixed deposits, time deposits, etc. The family members covered under this account include parents, spouse, children, in-laws, grandparents, grandchildren etc.

Eligibility criteria for opening a savings account in India

Below is a list of eligibility criteria for opening a savings account:

Must be at least 18 years of age. Applicants under 18 years of age may open a savings account for minors or children. Should be a resident of India. Foreign individuals residing in India can open only selected savings accounts offered by a few banks. Documents required to open a savings account

Below is a list of documents required to open a savings account:

PAN card. Aadhar card, which is used to link it to a savings account to receive various eligible government subsidies. Other documents such as proof of identity and residence, including voter identity cards, ration cards, driving licences, etc. Photographs or videos are required depending on the type of account.

Recommended Reading:What is an Indian PAN card?

Interest Rates on Savings Accounts in Popular Banks in India

Below are the various banking sectors and their corresponding savings account rates.

public bank

Below is a list of top public sector banks and their savings account interest rates:

银行利率（年利率）State Bank of India1 亿卢比以下为 2.70%，1 亿卢比以上为 3.00%Bank of Baroda1000 亿卢比以上，税率为 4.50%Bank of India2.90%Punjab National Bank3.00%Central Bank of India3.25%Canara Bank4.00%Indian Bank3.25%private bank

Below is a list of the top private sector banks and their savings account rates:

Bank Rate (p.a.) ICICI Bank up to 3.50%HDFC Bank up to 3.50%Axis Bank up to 3.50%IndusInd Bank up to 6.75%Kotak Mahindra Bank up to 4.00%RBL Bank7.501 TP3T IDFC First Bank7.00%Yes Bank3.00% - 7.00%Small Finance Bank (SFB)

Below is a list of the top small financial sector banks and their savings account rates:

Bank Rate (APR) Ujjivan SFB up to 7.50%Equitas SFB up to 7.80%Suryoday SFB up to 7.75%Jana SFB up to 7.55%Utkarsh SFB up to 7.75%ESAF SFB4.00% - 7.50% AU SFB3.50% - 7.50%

How does an Indian bank savings account work?

The following are the features of a savings account that will ensure its functionality:

Deposit cheques: Deposits can be made by cheque, if permitted by the relevant bank, or you can check the status of the deposit via the bank's mobile app. Direct Deposit: The Direct Deposit feature allows users to transfer funds directly into a savings account. Deposit or Withdrawal: Withdrawals or cash deposits can be made via ATM and by visiting bank branches. Request a cheque: Users can request a bank to issue a cheque using funds from their savings account. Electronic transfer (bank to bank): Savings accounts offer the option of transferring funds online from one bank to another through various modes such as IMPS (Instant Payment Service), NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement). From Checking Account to Savings Account (Internal): Savings Accounts enable you to transfer funds from your checking account internally to your savings account and do it instantly at any time.

How to open a savings account in India?

Here's how to open a savings account in India:

on-line

Here are the steps to open a savings account online in India:

Visit the official website or download the bank's mobile app. Select the type of account to be opened. Complete the KYC process by providing the required details as mentioned above, e.g. Name Date of Birth PANAadhar Address On successful verification of documents, the savings account will be activated.

offline (computing)

Here are the steps to open a savings account in India through offline mode:

Visit the nearest bank branch. Obtain an application to open a savings account. Provide a self-certified copy of proof of identity and address. Deposit the required amount according to the type of account. Once the funds are deposited and successfully verified, the bank will activate the savings account.

Advantages and Disadvantages of Bank Savings Accounts in India

Here are the pros and cons of savings accounts:

The advantages of savings accounts are as follows:

Allows setting up standing instructions for bill payment. Allows withdrawals or deposits at any time. Account holders can withdraw funds from any bank ATM in the country. In case of default by the bank, DICGC can cover savings account deposits up to Rs 5 lakh. Transfer of funds from savings accounts can be done both offline and online. Additional insurance benefits such as lost card liability, health insurance, personal accident insurance, etc. are available. Depending on the type of account and debit card offered with the savings account, special offers and discounts will be provided to the account holder.

Drawbacks:

Savings accounts will be charged a penalty if the account holder fails to maintain a minimum balance or monthly average balance (MAB). A fixed fee free transaction will be charged to the account holder for withdrawals from the savings account via an ATM machine that exceeds the maximum limit. Funds deposited in the bank will yield a relatively lower interest rate than other investment options.

Ways to Maximise Your Savings Account Returns

Here are ways to maximise your savings account returns:

Taxation: Users can maximise their savings account earnings by claiming tax deduction on interest earned on savings account. As per section 80TTA of the Income Tax Act, 1961, interest up to Rs. 10,000 is exempt from tax for account holders below 60 years of age. Account holders above 60 years of age can claim tax deduction on interest up to Rs. 50,000 under section 80 TTB of the Income Tax Act, 1961. High Interest Rates: To maximise your savings account benefits, research the interest rates offered by various banks online and choose the bank that offers the highest interest rates on savings account deposits.

How much should a user deposit in a savings account?

Below are details on how much money users should keep in their savings account:

Banks and credit unions limit the amount of money in a CD account, savings account, money market, or checking account, and the limit is set based on the type of account or the total amount in all accounts. Depending on the bank, the amount a user can keep in a savings account may vary and may be higher, lower, or nonexistent. Please check the bank's website or customer agreement for more details.

How to choose the best savings account?

The following important parameters should be considered before choosing the most appropriate savings account:

Minimum Balance Requirement: Some banks require a minimum account balance and will charge the account holder a penalty if that balance is not maintained. While some banks offer easy-to-maintain zero-balance accounts where you can be charged a fee even if the account balance is zero, these types of accounts are one of the most suitable options as long as they meet all your requirements. Savings Account Interest Rates:Most Indian banks offer savings accounts at a general interest rate of 2.50%.Research online to choose the savings bank account that offers the highest interest rate. Low Account Maintenance Fee: Most Indian banks offer savings accounts that charge various service fees such as cheque book issuance fee, annual ATM card fee, fund transfer fee, ATM withdrawal fee, statement issuance fee, etc. Choose those savings accounts that charge affordable service charges for savings accounts. Debit Card Features: Choose banks that offer debit cards with various features such as joining offers, free cinema tickets, travel offers, shopping discounts, free or low-cost EMIs, and a wide range of other discounts, offers and deals. Additional features: check out those banks that offer additional features for savings accounts such as free cheque books, online and mobile banking, doorstep cash deposits or withdrawals, and more.

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Guide to Savings Accounts and Account Opening in Indian Banks www.deekpay.com