Most people’s primary method of interacting with a financial institution, primarily a bank, is through their savings account. As per savings account meaning, this account acts as a safe place for your extra cash while also allowing you to save for your family’s future. Despite the fact that this account is quite important in your investing portfolio, it is the least explored financial tool.
Savings bank accounts are important in our investing portfolio since they help us keep our money safe. They are the least investigated financial asset. This article will examine some of the aspects that can assist you in selecting the best savings account for your needs.
Such an account type is a safe place to keep your money, with far fewer risks. Whether it’s a regular bank or an online bank, they offer a variety of services. A premium savings account, for example, allows you to save a larger sum for a longer period of time while earning big returns.
Do you have trouble deciding which sort of savings account to open? We’ve compiled a list of factors to examine that will assist you in determining the best type of it for you. Let’s take a closer look.
Consider These Factors When Choosing A Savings Account
Interest Rate
When compared to other investing options, savings accounts often provide the lowest interest rates. Most banks continue to offer low savings account rates of under 4% even after the Reserve Bank of India deregulated interest rates in 2011. While some private banks advertise rates of 6% or greater to entice consumers, it is always a good idea to read the tiny print before picking a bank. There are savings account calculator provided by various financial institutions to calculate the amount.
Minimum Balance
Most public sector banks have no or low minimum cash balance requirements for accounts (Rs. 500-1,000). On the other hand most private players would have a larger minimum balance requirement (Rs. 5,000-10,000 or more). It is preferable to choose a bank that does not need you to deposit a large sum of money.
Presence or network of the financial institution
Web-based applications, such as net-banking or mobile banking, have extended into the financial industry and are thriving among the current generation. However, there are some transactions that need you to visit a branch, and having a bank with a large network of branches is useful.
Service Charge
After you’ve used up your free quota (25-50 check leaves) for the financial year, some banking institutions charge you for ancillary services. These services include SMS alerts, duplicate ATM cards/PIN numbers, and check books. Make sure you are aware of these fees before opening a savings account. A more transparent bank, on the other hand, is preferable to one that looks to be low-cost but hides a slew of fees.
Debit Card Deals
Most banks provide discounts on their debit cards to differentiate themselves from competitors, ranging from cash-back offers to insurance coverage. Some banks, on the other hand, charge annual fees on debit cards, while others waive them if annual transactions reach a certain threshold. For example, banks offer gold and platinum debit cards, which come with a host of benefits but usually come with a yearly fee.
Doorstep Banking Facility
With today’s demanding schedules and stressful lifestyles, several private banks provide services such as cash/check pickup, demand drafts delivery, and documentation pickup at their customers’ doorsteps. Banks have begun to offer doorstep cash collecting for account deposits. Certain banks may also deliver demand drafts to the designated address. But all of these services come at a price, which you should consider before opening an account with that bank. Several banks have formed priority banking verticals, with dedicated relationship managers catering to high-net-worth clientele.
Accessibility
The bank should be physically, online, and over the phone accessible. It is recommended that you create an account at a branch that is closest to your home. Consider creating a new account if you already have one or more accounts that aren’t physically close. Also, make sure that you can communicate with others in an emergency through several channels such as emails, phones, and apps.
Types of Savings Account
Savings accounts offer a variety of features, services, and benefits. The variety of different types of savings accounts available on the market, each tailored to fulfill the needs of different savings account clients, makes the savings account more convenient. Savings bank accounts are divided into five categories.
Regular account
You can deposit money into a regular or basic savings account at any time. Throughout the year, the account receives a modest percentage of its balance in interest. You’ll be required to keep a minimum balance in your savings account and will be penalized if you don’t. You will have more deposit and tenure flexibility, but withdrawals will be limited.
Salary Account
Salary accounts, as the name implies, are for people who are paid a salary. Employers typically set up savings accounts for their employees. Aside from the standard advantages of a savings account, you also have the benefit of no minimum balance requirements. If no pay is credited to the accounts for three months in a row, the accounts are immediately converted to conventional savings accounts. The account will be subject to a minimum balance requirement in such instances.
Senior Citizens Account
This type of account is designed to provide financial security to senior citizens. This account offers high interest rate with minimum balance requirement. These types of accounts can be linked to pension funds.
Children and Minor Account
These types of savings accounts are for people under the age of eighteen. A children’s savings account aims to instill a sense of investment in youngsters while also allowing parents to save for their children’s future. The savings account for children and minors has the same features as the standard savings account. A minimum balance is not required to manage a minor or children’s account.
Women’s account
Women’s savings accounts are specifically designed for women. Women’s savings accounts offer better interest rates and discounts on bank products, in addition to the benefits that come with standard savings accounts.
