Ready to learn the key features of a savings bank account? This guide will provide you with helpful information on how to understand your savings.
A savings bank account can be an excellent way to manage your finances and save money for the future. Understanding the features and benefits of a savings account can help you make an informed decision about how to use your money wisely.
For decades, bank offers various kind of bank accounts to the common people with different features and benefits. Popular bank in India, such as State Bank of India, ICICI, HDFC and others provide the services.
These savings bank account are meant for saving funds moreover it inculcates the habit of saving money to the user. If properly used, it may streamline your cash flow and enable you to take control of your financial dealings.
The Types Of Savings Bank Account
There are many types of savings bank account that you may find in the bank. Bank Accounts for minors, adults, retired person or you name it. Bank has customized as per users’ need.
Here are some of the popular types of savings bank account that you can open in India.
- Normal Savings Bank Account
- Minor Savings Bank Account
- Pension Account
- Corporate Salary Package Account
- Basic Savings Bank Account
- Jan Dhan Yojna Account
- Liberalized KYC Account
- Tiny Account
The features and benefits that you are going to get depends on the type of account you have open. Maximum benefits are usually come along with high end account such as Savings Gold, Diamond and Platinum Account.
These benefits come in free uses of services and add-on services. Its features reflect how you are going to get the benefits. Minor accounts are meant for minors, so there will be limitations on transaction limit. Let’s find out some features of Normal Savings Bank Account. This will be the backbone of all types of savings account.
Interest Rates and Compounding
Savings accounts typically come with interest rates that range from 1% to 5%. Interest is usually compounded daily, meaning that you can increase your savings by a small amount each day. Compounding interest allows your money to grow over time and helps it reach its full potential faster.
The interest rate of some banks are higher than the others. It depends on the bank and they usually change these rates from time to time. Some bank credit interest to the account on monthly basis and some does at the end of every quarter.
Maximum Deposits and Withdrawals Limits
Many savings accounts have a limit to the amount of deposits and withdrawals you can make each month. This affects your ability to access funds when you need them and limits how much you can deposit over time. Check with the bank or financial institution that offer the savings account for their specific limits on deposits and withdrawals so you know exactly how much you can withdraw or save on a regular basis.
The reason bank keep limitations on savings bank account make sense. In a way to say that it is meant for savings rather than business transaction where transaction uses will be higher. Accordingly banks have put a limitation on it. Most of them have 4 to 10 free transactions, beyond that bank charges nominal fee in terms of transaction charge.
But, generally, there is not limit on maximum amount that you can deposit or withdraw. The catch is that, when you do transaction beyond the limit set against your account, you will charged with fees.
Debit Card Accessibility
Depending on the account you choose, many savings accounts come with debit cards that use a pin to access funds from the account. This can be a convenient way of accessing money instantly and is available 24/7. Keep in mind that most debit card fees and charges are associated with regular transactions like shopping at the store or for online purchases.
Bank normally issue ATM Debit Card to its customer. These plastic card is quite handy while on travelling. You do not have to worry about carrying cash which is also risky. Wherever you go, you will be accessible to your account, even in foreign countries. Banks handle the currency conversion problem digitally through ATM, whereas the amount that you can withdraw can not go beyond your card limit. On top of it, of course, you have to follow the terms and conditions of using money abroad.
Access to Online Banking Platforms
Most banks offer an online banking platform to their customers, allowing them to review account activity, transfer funds between accounts, and pay bills directly from the account. Online banking platforms are both secure and user-friendly which make it easy for customers to manage their funds. This is especially convenient if the customer does not live close to the bank or wants access to their financial information from anywhere in the world.
The online banking open up a new era of maintaining savings bank account. Through internet banking, you can do any sort of transaction. Be it a payment to friends and family, checking and reviewing your account, to sending money abroad. Not to mention the other non-financial transactions that you can do at your home. From account opening to sending request for new ATM card and chequebook. You can literally do everything if you have an active internet banking in your bank account.
Opening a Joint Account Option
You may have the option of opening a joint bank account with someone else. A joint account allows both parties to deposit and withdraw funds from the same account, giving you greater flexibility and convenience. Both users will be required to provide their personal details when opening an account and be able to monitor activity via online banking or using the mobile app.
A joint savings bank account is common in the Indian family. People use these facility for making a joint account between spouses, between siblings and between friends. The account operation mandate has to be specific, because ultimately bank will allow you to use the account as per the mandate only. Below are some of the common account mandate that can be seen in Indian Bank.
- Either or Survivor
- Former or Survivor
- Later or Survivor
- jointly
If the above mentioned mandate is not given when opening a Joint Savings Bank Account, your bank will not allow you to access your account until you advise proper mandate to your account.
Specific Types Of Savings Bank Account
There are types of account which give specific type of benefits. You can get the benefits of earning higher interest on idle money by way of automatic sweep facility. Account with automatic sweep facility can be seen in almost all the bank. SBI has Corporate Salary Package, SBI Savings Plus Account and HDFC has Max Savings Account. When you open these accounts, its for sure that your savings will earn better interest than the other types of account.
Other specific types of account that is worth mentioning here are Women Savings Bank Account, DigiSave Youth Account, Savings Farmer Account, Super Kids Savings Account and Kids Advantage Account of HDFC Bank.
Nomination in Bank Account
Nomination in bank account is one of the most important thing that we generally do not give much of a thought. But, person who knows well about a bank account would definitely make nomination arrangement in his account.
The reason is simple. It make easy for your near and dear ones when you pass away. Nomination help the nominee to claim the fund when the primary account holder dies with minimum documentation otherwise deceased claim settlement with legal representation takes not only time, it requires multiple paperwork too.
Offers And Services
A number of high end Savings Bank Account has attractive seasonal offers and in-built benefits too. You need to find out more on these before opening a bank account. Some banks give Personal Accident Insurance free of course with an account. All the Salary Package Account under SBI Corporate Salary Package are one of a kind, which gives an in-built PAI-Personal Accident Insurance plans.
Its seen in most of the bank, there a certain numbers of cheque leaves that are issued to customers without any charge. Transaction charge are also waived sometimes, it all depends on which bank you open it.
At Last, Check Out This List
When you have opened a Savings bank account, make sure you get the following services. These services should come for free or if chargeable it must be minimal.
- A Bank Account Passbook.
- An ATM Debit Card.
- A Credit Card (Optional).
- An Internet Banking.
- A Mobile Banking.
- Phone Banking.