Q1. What is Savings Account?
A deposit account held at a bank or other financial institution that provides principal security, a modest interest rate and high degree of liquidity, is termed as a savings account. Savings account funds are considered one of the most liquid investments apart from cash. Savings accounts are thus ideal for keeping emergency money or money for daily expenses that you might need at a later date.
Q2. Who provides savings accounts?
Savings accounts are the key business of commercial banks operating in India, hence to open a savings account, all you need to do is fill out a simple form on Paisabazaar.com and you will get a variety of options regarding which banks provide savings accounts that suit your requirement. You can compare various options based on interest rate, minimum balance requirement as well as other offers. Once you have made your choice, fill out the online form and provide them with accepted identification and other relevant documentation.
Q3. How do I choose the best Savings Account for me?
Factors that need to be considered while choosing the right bank to open a savings account with include interest rate offered on your deposit, minimum balance required to maintain your account, customer service, branch availability and other factors. A bank that offers the best combination of these factors should be opted for when opening the savings bank account.
Q4. What are the various types of Savings accounts?
Apart from the regular savings accounts, following are some of the other types of savings accounts available at banks in India:
- Joint Account: This is a savings account than can be operated by more than one account holder. Though most joint accounts featured 2 account holders, currently some banks allow up to 4 joint holders of a single account.
- Woman’s Savings Account: A woman’s savings account can only be opened by a woman and special features and interest rates are applicable to this account.
- Senior Citizens’ Savings Account: This type of account can only be opened by a person who is aged over 60 years of age. There are a number of fee waivers and preferred rates offered in case of such accounts.
- Minors’ Account: In this type of account, the minor child is the second holder of the account, while the parent or guardian is the primary holder. This type of account may be set up by parents at a young age to help their children understand banking and savings.
- Salary Account: This is a special type of savings account in which, the minimum balance clause is waived off. An individual can hold only one salary account at a time and apart from the zero balance benefit, a salary account may have other benefits as well.
Q5. What are the documents required to open a Savings Account?
Though the documents required may vary from bank to bank, usually any one document from each of the below category works:
Proof of individual’s identity
Proof of residence
Permanent driving licence
Permanent driving licence
Permanent Account Number (PAN) card
Society outgoing bill (only from registered societies)
NREGA Job Card
Gas bill (pipeline connection only)
Property tax bill
Domicile certificate with address issued by the Municipal Corporation
Government employee ID card
Defence ID card
NREGA Job Card
Registered rent/lease agreement (registered with State Government or similar registration authority)
Q6. Are there any restrictions with regard to age, income etc. for opening a basic Savings Account by banks for individuals?
There are no restrictions imposed with regard to age or income of an individual at the time of opening a savings account. There however may be different minimum balance requirements based on the type of type of savings account.
Q7. Is there a minimum opening balance for a savings account?
The minimum opening balance for a savings account differs from bank to bank and depends on the features and services once would like to avail at the time of opening an account. Normally, it ranges between Rs 0 and Rs 25, 000 for regular customers and may go up to Rs. 2,00,000 or even higher for premium customers.
Q8. What are the various types of accounts based on minimum balance requirements?
Depending upon the minimum balance requirement, savings accounts may be classified into 3 key categories – Classic, Gold and Platinum. In case of classic accounts, the minimum balance requirement for the savings account is Rs. 10,000, while for Gold category accounts; the minimum balance requirement is between 10,000 and 25,000. In case of a Platinum category account, the minimum balance requirement is greater than 25,000 (usually Rs. 50,000 or Rs. 1, 00,000). The services and freebies offered usually differ from one type of account to another, with Platinum accounts featuring the greatest number of features.
Q9. What are the charges levied on my account if the required minimum monthly balance is not maintained?
According to RBI guidelines, banks cannot penalise you for not maintaining the minimum balance in a dormant account. For operational accounts that have a balance lower than the prescribed minimum balance amount as per the account type, the bank is liable to charge a non-maintenance fee as per the bank’s procedures in addition to the Service Tax and Education Cess at the applicable rates. However, not all banks or account types feature these charges.
Q10. How is the average monthly balance calculated?
To calculate the average monthly balance, banks consider the total of daily closing credit balance of each day during the month and divide it by the number of days in the month. If the average is less than the requirement, charges for non-maintenance will be levied at the beginning of the next month. For complete details on charges for non-maintenance of AMB, get in touch with your bank.
Q11. Is there a difference between a private bank savings account and one offered by a public bank?
In terms of operation, the services offered by a public sector bank and a private sector bank are the same, however, there are some notable differences between these savings accounts in other areas. The minimum balance requirements are often higher in case of a private bank savings account as compared to a public sector bank. On the other hand, the free of charge benefits offered by the public sector bank are often much greater than those offered by a public-sector bank.
Q12. At what rate will I earn interest on the balance in my Savings Account?
The rate at which interest is calculated in a savings account is usually in the range of 4%–7% per annum. SBI usually offers 4% on its deposits while Yes Bank, RBL Bank and Kotak Bank offer 6%.
Q13. When is the interest earned on my saving account deposited/credited into my account?
Interest earned on your Savings Account balance is credited to your account on a half yearly basis. However, the interest is calculated either monthly or on an average daily balance basis.
Q14. Can I open a joint account? Who are eligible for joint account holders?
Opening a joint account is same as having a savings account except that two people will operate the account instead of one. Anyone above the age of 18 can open a joint account. Minors can also open joint accounts with one of their parents as the other signor of the account.
Q15. Is there any benefit of opening a Fixed Deposit account and a savings bank account together?
Yes. If you decide to open a fixed deposit account and a savings bank account at the same time, many banks provide you with the benefit of fee waivers and additionally, the minimum balance requirement for your savings account is waived by many banks,
Q16. When does a savings account become dormant?
As per the guidelines issued by Reserve Bank of India (RBI), the account becomes dormant if the customer does not initiate transactions (withdrawal of cash at a branch/ATM, payment by cheque, transfer of funds through Internet Banking/Phone Banking/ATMs etc) for a continuous period of two years. Your facility to transact through direct banking channels such as ATM, NetBanking, PhoneBanking, etc. is also restricted by the bank in the case of an inactive account.
Q17. How do I activate a ‘Dormant’ Savings Account?
In order to activate a dormant account, you will have to:
- Contact your branch in person
- Submit a written request for activation of your dormant account
- Produce and submit copies of current proof of identity and address for verification
- Initiate a transaction using cash or cheque to activate your account again.
Q18. What are the benefits offered by senior citizens savings account?
Some of the benefits offered to senior citizens are:
- Free passbook facility
- Free cash withdrawal facility at any bank’s ATM
- Free SMS alerts to keep track of transactions taking place in your account
- Easy payment of utility and other bills using online banking
- Discounts at partner diagnostic centres and hospitals across the country
- Priority service at bank branches
Q19. What does an ATM Card Debit Card do?
An ATM card cum debit card allows you to carry out multiple transactions using the balance deposited in your account. Firstly, you can withdraw cash at any ATM any time of the day using such a card linked to your savings account. Additional transactions at the ATM using your card may include mobile phone recharge, bill payment, transfer of money to another person and much more. Apart from the ATM-based transactions, you can also carryout purchases using your ATM cum debit card at any POS (point of sales) machines at stores, restaurants, etc.
Q20. Can I use my ATM cum Debit card for online purchases?
Yes an ATM cum debit card can be used for online purchases. However, you will have to register with MasterCard Secure Code, Verified by VISA or a similar service in order to complete the online purchase process. In some cases, using your debit card for purchases can earn you rewards such as cash back or reward points on your purchase.
Q21. Can I use my ATM cum Debit card for international purchases?
Yes. Many ATM cum Debit cards are enabled with international payments support. However, you may have to let your ATM cum Debit card issuer know that you intend to use your card at a location outside of India so that any block that may be present is removed before you use your ATM cum debit card overseas.
Q22. Can I open a DEMAT Account with my Savings Account?
Yes, DEMAT Account can be opened along with your Savings Account. DEMAT accounts are required to trade in various stock market instruments and they often feature charges separate from the savings account.
Q23. How do we add/modify or delete a nominee for my savings account?
It is a very easy procedure and all one has to do is obtain a form from the branch or download it online. Once you have filled the form, deposit it to your nearest branch. You can also call your bank to check if it can be changed online using your NET banking facility. If you are able to change it using NET banking, you may not have to physically visit the branch.
Q24. How can I request for Physical copy of bank statement?
Your bank account statement can be downloaded using the net banking facility offered by your bank. However, if you have not registered yourself as a net banking customer, you can alternatively, request your bank using telephone banking to send your bank statement. The statement will be delivered to your registered home address with 7 working days.
Q25. How do I deposit money into my savings account?
You can deposit money into your savings account through cash, cheque or bank draft. Drafts and cheques can be deposited at registered drop box locations of the bank (usually at ATMs and bank branches). Cash may be deposited at certain ATM machines that have deposit acceptance capability or at the cash counter of the bank during working hours.
Q26. How do I withdraw money from my account?
You can withdraw money from your account using a debit card linked to your ATM at any ATM 24×7. Other options include cashing a cheque linked to your credit account in person at the bank branch or a cash withdrawal using a withdrawal slip in case you account does not have the cheque book facility.
Q27. Are there any charges for cheque books and ATM cards?
Most banks provide you with one free cheque book of 20 leaves every quarter, however, the number may vary from one bank to another as well as from one type of account to another. ATM (automated telling machine) cards also have a yearly fee plus taxes on their use. However, the fee may be waived in case you make debit purchases using your card beyond an annual limit prescribed by the bank.
Q28. What are the charges that I need to pay for requesting a copy of my bank statement?
Banks usually levy a charge of up to Rs 100 in case you request for a copy of your bank statement. Transactions up to the last 90 days are usually provided online at no extra cost. For a statement which transactions that are more that 90 days old, the bank may levy a charge.
Q29. What are the different ways I can transfer money from one savings account to another?
In case of domestic transfers i.e. transfer of money from one savings bank account to another in India; you can do any of the following:
- Cash/Cheque Deposit
- NEFT/RTGS Transfer
- IMPS – Interbank Mobile Payment Services
Q30. What is a NEFT Transfer?
NEFT or National Electronics Funds Transfer is a method of sending money from one bank account in India to another. The details required to complete this transfer include the beneficiary name, beneficiary account number and the bank IFSC (Indian Financial System Code). NEFT transfers can be only during certain times of the day as per the directives provided by RBI. NEFT transfers can be made for a minimum of Re. 1 and a maximum of Rs.10 lakhs.
Q31. What is a RTGS Transfer?
From the user’s perspective, RTGS or Real Time Gross Settlement is very similar to NEFT and it requires similar data to complete the transfer and similar operational hours. The minimum amount for RTGS is Rs. 2 lakhs, while the maximum amount is Rs. 10 lakhs for a RTGS transfer.
Q32. What is IMPS?
IMPS stands for Interbank Mobile Payment Service (IMPS). Using this service, account holders with some of the key banks in India, can send money to beneficiaries using just their mobile phones. The service is available 24 hours a day and even on Public Holidays. The IMPS transfer system has now been extended beyond customer to customer transfer to include bill payments such as merchant payments as well. There are charges applicable for this service and these charges may vary slightly from one bank to another.
Q33. How do I use a mobile app to access my account?
Most banks in India have introduced various mobile applications designed to promote on-the-go banking services to their customers. These applications can be downloaded from licensed app stores of Google and Apple. Once you have downloaded and installed the app, you will have to register for the service using your cell phone. After completion of the installation process, you have to register for the service and then you can use your phone app to access your savings bank account.
Q34. How do traditional savings bank accounts differ from a payment bank accounts?
Payment banks are a relatively new concept and they are being developed to mainly help out the relatively unbanked segments like migrant workforce, small businesses and low income households. Though a payment bank account may issue ATM/debit cards, this type of account can only accept deposits of Rs. 1 lakhs or less in a year. Moreover, payment banks cannot issue credit cards or provide loans to their customers. The payment bank would earn money on every transaction you make through your payment account, therefore, no minimum balance criteria is applicable.