Savings Account Definition, Types, and Benefits

Savings accounts are financial instruments that let you deposit your money safely and earn interest on it. Eligible people can open savings accounts with any of the banks. One can deposit and withdraw money from the account very easily using a debit card, net banking, UPI transfers, or offline at bank branches. You can have multiple savings accounts from different banks and utilize their offers as per your need.

Different banks give different interests on the funds lying idle in your savings account. Before opening an account, compare the interest rate and fees related to the account, which will help you select the right bank. You can check the interest rate, any fees or charges, FD interest rates, and other features on the bank’s official website. Also, you can visit the bank branch to get all this information.

Eligibility criteria to get a savings account

The eligibility criteria for a savings account can vary from bank to bank. To obtain complete information, you must visit their branch or official website. However, a few common criteria are as below:

• Indian citizens above 18 years old
• Foreign nationals and Hindu Undivided Families are also eligible
• The minor account can be opened with their parents/guardian
• Senior Citizen Card

Documents required for a savings account

Below mentioned documents are required to open a bank account:

• Identity proof: PAN card, Aadhaar card, Voter ID, Passport, and Driving license
• Address Proof: Aadhaar card, Driving license, Voter’s ID, Passport, Utility bill, Passport size photographs.
• For minor accounts, documents are needed from the parent/guardian as well.

Different types of savings accounts

Here are different types of savings accounts and their uses:

• Regular savings account: This is a regular account given to the user for day-to-day use.
• Joint account: Joint account is also a regular savings account, but more than one person can access or operate the account. All the transactions can be done, and viewed by all the partners of a joint account.
• Salary account: These accounts can not be opened by everyone. Only as per the requirement of a company, banks create these accounts for the employees. Regular savings accounts can also be upgraded to salary accounts by an employee if their company has tied up with the bank to disburse salary. If there is no salary credited to the salary account, these types of accounts are converted to regular savings accounts.
• Senior citizen savings account: These are regular savings accounts, but with higher interest rates or other bank privileges.
• Zero balance account: Usually savings banks have a minimum balance requirement. The minimum balance can vary from bank to bank. If the account holder fails to maintain the minimum balance on a monthly basis, the bank charges a fee from the account holder. However, few of the banks are providing zero balance accounts, where no minimum balance should be maintained.
• Minor account: These accounts are for the age below 18, where their parents or guardians have to share their documents as well. Once the minor cross the age of 18, the account will be converted to a regular savings account.

Benefits of a savings account

Now we will discuss the advantages of a savings account:

• It’s the safest place to park your ideal funds
• Banks give interest on the fund available in your account
• Most of the leading banks in India have net banking or mobile banking facility
• Bank also provides FD and RD investment to the account holders
• You can also opt for a debit card or chequebook as per your need
• Using a debit card, cash can be withdrawn easily from the ATM. However, banks have limitations on ATM cash withdrawals from the same or other bank’s ATMs in a month.
• Using net banking or mobile banking, it’s very convenient or easy to make any transactions
• Bank offers locker services (one rent) where important or valuable items can be kept safely
• Debit card comes with many offers and discounts on various merchant website or outlet
• The debit card also comes with death or accidental insurance

Also Read: Credit Card: Definition, Application, Use, and Advantages

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