Going for a Savings Account? Read This First

Going for a Savings Account? Read This First

Saving money is essential. But money never grows just by saving. Money grows only when invested. Hence, it is crucial to know where to put your money to reap the maximum benefits.

In India, a savings account is considered one of the most secure and straightforward investment options. According to Government data sourced from banks, there are more than 157 crore savings and current accounts in India.

If you do not have a savings account or are about to open one, read this article and know everything about the same.

A savings account provides you with the option to deposit and withdraw the money as per your wish. It offers interest on the deposit and is the safest way to grow money. There are no fixed rules on the period for which money should be maintained in the account.

The account holder can deposit and withdraw according to his/her needs and convenience. Put simply; a savings account acts as your wallet, where you can store and withdraw as much as you want while earning interest on the deposited sum.

Regular Savings Account: It is a basic savings account that does not need any minimum deposit periodically. It allows the depositor to withdraw money anytime subject to daily withdrawal limits.

Salary Savings Account: It is an account opened for depositing salary of employees of a company under any corporate arrangement. The account has multiple benefits. It is a zero balance savings account, and the employees are provided numerous benefits and services.

Savings Account for Women: Banks recently have started special deposit schemes for women with privileged services. Female entrepreneurs having these accounts are eligible to apply for high-value loans for business development or any other purpose.

Savings Account for Senior Citizens: These accounts are only available to senior citizens and have unique benefits. They are relatively similar to that of regular savings account. However, banks generally offer a higher rate of interest and benefits to senior depositors.

Savings Account for Minors: These savings accounts are provided by banks to teach and inspire children about savings from an early age. These accounts are opened in the child’s name, under the guardianship of parents or any legal guardian. The guardian has to ensure that they allocate a certain amount for their kids regularly.

Interest Rates: Every bank has different criteria for providing interest rates to its customers. Leading financial institutions like Axis Bank offer an interest rate as high as 7. 30% (Subject to Certain Conditions) on their ASAP savings account.

Minimum Balance: Similar to the interest rates, every account has different minimum balance requirements. In majority of accounts, zero balance benefit is provided to the customers. However, there are some corporate accounts in which minimum balance needed can go up to 25,000.

Extra Benefits: Many banks offer various deals like shopping discounts and restaurant discounts on their debit cards. Therefore, always choose an account that provides these benefits and has internet and mobile banking facility. It becomes easier to manage your details, and you get regular updates about your account’s status and transactions.

1. Eligibility: Savings bank accounts can be opened by:

  • Any individual residing in India
  • Hindu Undivided Family (H.U.F) with separate PAN Cards
  • For minors under the guardianship of parents

2. Documents Required: A registered certificate that is issued by any government authority can be used such as Voters’ ID, Driving License, PAN card, Passport etc. Applicants are also required to submit two recent photographs (Passport sized) along with the Application form.

3. Tax Benefit: As per the Income Tax Act, from 1 st April 2012, a deduction of 10,000 is allowed under Section 80TTA. This deduction is allowed for interest earned on savings account during the financial year.

Summing Up

“A penny saved is a penny earned” is a quote that suits savings account correctly. It is a great place to keep cash that you don’t plan to spend immediately. The account keeps your money accessible and safe while paying you interest. So, if you don’t have one, hurry up and get the security and benefits this investment option has to offer.

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