What is a savings account?
A savings account is held at a bank or other financial institution as an interest- bearing account. These accounts usually pay a moderate interest rate. This is a deposit account that an individual keeps with a bank or any financial institution that provides principal security with the modest interest rate. This account is considered to have high liquidity so that one can withdraw the amount at any point of time. You can open free savings account with CreditKaro.com
- Savings account pays interest to the account holder and the deposited funds are easy to withdraw, which is a good option for liquidity in case of an emergency.
- Savings account generally earn you lower rate of interest than other saving instruments and investment models.
- The interest that you earn from savings account is considered as taxable income.
- Savings account
- Term account
- Current account
- Recurring deposit account
Types Of Savings Accounts
There are various types of savings accounts for various purposes let’s discuss them below:
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BASIC SAVINGS ACCOUNT
This is a deposit account that an individual keeps with a bank or any financial institution that provides principal security with the modest interest rate. This account is considered to have high liquidity so that one can withdraw the amount at any point of time.
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SALARY ACCOUNT
This is a type of account where the salary of an individual is usually disbursed. In this account the minimum balance clause is waived off and is restricted to one account per person.
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JOINT ACCOUNT
This is a type of account is usually handled by multiple account holders. Banks allow 2 to 4 account holders for a single joint account currently.
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WOMAN’s SAVINGS ACCOUNT
This type of account is only provided to a woman and holds special features and interest rates applicable.
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MINOR’s SAVINGS ACCOUNT
This type of account is held by an adult, making a minor child its secondary holder. Generally, Parents open this account for their children in order to help them save money for themselves.
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SENIOR CITIZEN’s SAVINGS ACCOUNT
This is an account which is offered only to people who are above the age of 60, this account holds special features and waivers accordingly.
Difference Between Savings Account And Current Account
| SAVINGS ACCOUNT | CURRENT ACCOUNT |
|---|---|
| Savings account is relevant for those who are looking to save money. | Current accounts are designed for regular large size transactions |
| Savings account accrues higher interest. | Current account accrues lower interest than a savings account |
| Savings account cater to individuals. | Current account caters to companies and firms. |
| Savings account has a monthly transaction limit. | Current account does not have any transaction limit. |
| Minimum balance requirement is low compared to current account. | Minimum balance requirement is more than any savings account. |
| Rate of interest varies between 3.25% to 7.00% | Rate of interest is nil. |
| Overdraft facility is not allowed. | Overdraft facility is available |
Difference Between Savings Account And Fixed Deposits
| SAVINGS ACCOUNT | FIXED DEPOSIT |
|---|---|
| Savings account allows you to save money in the bank and earn interest on it, but that amount can be deposited and withdrawn at any point of time. | Incase of fixed deposit a fixed sum of money is deposited for a fixed period and withdrawal is only allowed after redemption date. |
| Savings account is suitable for a temporary period. | Fixed deposit is suitable in case of long-term investments. |
| Savings account offers facilities like online banking, phone banking, ATM facility, cheque book facility, ECS, NEFT, RTGS | Fixed deposits offer the facility of availing loan against it without breaking the FD. |
| Rate of interest range between 3.25% to 7.00% | Rate of interest range between 3.00% to 9.25% |
NOTE:-A savings account is held at a bank or other financial institution as an interest- bearing account. These accounts usually pay a moderate interest rate. This is a deposit account that an individual keeps with a bank or any financial institution that provides principal security with the modest interest rate. This account is considered to have high liquidity so that one can withdraw the amount at any point of time. You can open free savings account with CreditKaro.com
Savings Accounts For You
Account
FAQ
1What is savings account?
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Savings account is basically a deposit account that an individual keeps with a bank or any financial institution that provides a moderate interest rate and principal security. This account is considered to have high liquidity so that one can withdraw the amount at any point of time.
2What are the various types of savings account?
- There are various types of savings account for different purposes:
- Salary account:
- This is type of account where the salary of an individual is usually disbursed. This is a type of account where the minimum balance obligation is waived off and is restricted to one account per person.
- Joint account:
- This is a special type of account that is usually handled by multiple account holders. Banks allow 2-4 account holders for a single joint account currently.
- Woman’s savings account:
- This type of account is only provided to a woman and holds special features and interest rates applicable.
- Minor’s savings account:
- This type of account is held by an adult, making a minor child its secondary holder. Usually Parents open this account for their children in order help them save money for themselves.
- Senior citizen’s savings account: This is a type of account that is offered only to people who are above the age of 60, this account holds special features and waivers accordingly.
3Where can I apply for a savings account?
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Savings account can be availed from any commercial bank in the country. You can visit any branch of a commercial bank and request for a savings account, but you can opt for a much easier way, all you need to do is log on to CreditKaro.com and select savings account from the tabs on the home page, once you reach the product list page, choose the one that suits you the best from the options below.
4What are the factors that effect the selection of a savings account?
- Following factors affect the selection of a savings account:
- Interest rate
- Minimum balance required
- Branch availability
- Customer service
5Is there any age restriction when it comes to opening a savings account?
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NO. There are no age restrictions when it comes to opening an savings account.
6Is there a penalty if the minimum required balance is not maintained?
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According to RBI regulations, banks are liable to charge a penalty against non-maintenance of an operational savings account, this penalty also includes service tax and education cess at the applicable rates. Only a dormant account is free from any penalty.
7What is the Interest I can ear from the savings account?
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Interest rates usually vary from bank to bank, but the range varies from 4% to 7% per annum.
8When will I earn my interest from savings account?
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The interest rate that you earn is calculated either on a daily basis or monthly and it is credited to your account on a half yearly basis.
9How will I know if I am eligible for a joint account?
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Anyone above the age of 18 can open a joint account, the only significant difference here from a regular savings account is that two people can operate the account.
10Is there a waiver if I open a fixed deposit and a savings account together?
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Yes. If you decide to open a savings and a fixed deposit account together, many banks provide the facility of no minimum balance maintenance and waivers on additional fees.
11What all documents do I need to open a savings account?
- Proof of ID
- Passport
- Voter’s ID
- Permanent driving license
- Aadhaar card
- NREGA job card
- Residence Proof:
- Society outgoing bill
- Electricity/ Water/telephone bill
- Gas bill(pipeline)
- Property tax statement
- Domicile certificate
- Aadhaar card
- NREGA job card
- Defense ID card
- Registered rent/lease agreement
12How many types of account can I choose from?
- Basic savings account
- Salary account
- Minor’s account
- Woman’s saving account
- Senior citizen’s savings account
13How much is the minimum balance I can have in my savings account?
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The minimum account balance in a savings account can vary from INR 0 to INR 25000 depending upon which bank you’ve chosen.
14What is a dormant account?
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As per Reserve bank of India (RBI) guidelines an account becomes dormant when no transaction has been initiated by any means (cash withdrawal, issue of cheque, fund transfer, internet banking etc.) for two years at a stretch.
