Savings Account

A savings account is a deposit account held at a bank or other financial institution where you can store extra cash, earn interest on it and access it whenever required. It is the most basic type of banking instrument used by an individual and among the safest ways to ensure that you can easily access your hard earned money when you need it. You can deposit funds either by cash or cheques into the savings account or can transfer funds from other savings account using IMPS/NEFT/RTGS/UPI and earn interest on such deposits, which is credited to your account on a quarterly basis.

The applicable interest rate offered on a savings account usually ranges from 3.5% to 7% and varies from bank to bank. You are allowed to make withdrawals either by visiting the bank branch and cashing a cheque/withdrawal slip drawn on the account or at an ATM by using a debit card linked to the account. In most cases, you are required to maintain an average minimum balance for the quarter or the month according to the bank's rules and regulations. However, banks also provide zero balance accounts, which come without any complication of maintaining minimum balance in the savings account.

Types of Savings Account
In recent times, banks have come up with different types of savings accounts to cater to customers from different age groups and work domains. According to your eligibility and requirement you can open any of the bank savings account mentioned below.
Every bank offers different accounts, which differ in its features and benefits, based upon your personal savings account requirements you can choose the befitting option. The common types of savings account available in India include the following:
  • Zero Balance Savings Account
  • Regular/Basic Savings Account
  • Salary Account
Zero Balance Savings Account:
Zero Balance Savings Account is a type of savings account, which is offered by banks to individuals to operate freely without the strings of maintaining any minimum balance. Unlike other savings account, account holders are not required to maintain any minimum balance as zero balance savings accounts do not come with the constraint of maintaining a minimum balance. To open such an account, applicant will have to submit the basic KYC documents or can open a zero balance savings account online using Aadhaar based eKYC.

Regular/Basic Savings Account:
A regular savings account features the minimum of facilities and basic rates for services. You have to ensure that you maintain the prescribed minimum balance in your savings account so as not to incur extra charges.

Salary Account
Also a type of savings account, this can only be opened by a salaried individual and most companies directly deposit the employee's monthly salary into this account. A key feature of the salary account is that it is a zero balance savings account, which implies that you do not need to maintain a minimum balance in the savings account. If the monthly salary is not credited into this account for 2 to 3 months, this type of account is automatically converted to a regular savings account with minimum balance requirements.

Key Features and Benefits of Savings Account
The most important benefit of opening a savings account is that it helps you inculcate a habit to save and you can earn interest on this deposited amount. Features of savings account vary according to the type of account you choose. Here we have listed a few of the common features to help you understand the benefits of opening a savings bank deposit account:
  • The savings account interest rates range from 3.5% to 7% p.a.
  • Network branches and ATMs of the respective bank are easily accessible.
  • Transfer funds easily using IMPS/NEFT/RTGS/UPI facilities to any bank account.
  • Internet Banking and Phone Banking facilities for a quick check of balance and bill payment.
  • Personalized cheques for enhanced security.
  • Personalized Account Number.
  • Several offers and discounts on Debit.
  • No limits on the amount deposited.
  • Facility to link loan EMIs or RD deductions through the savings bank account.

Eligibility Criteria

Applying for a savings account does not require applicants to satisfy any income or employment criteria. The eligibility criteria for opening a savings account are minimal and might vary from one bank to the other, but here are some common requirements-
  • Savings account can be opened by an Indian citizen, Non Resident Indian and also foreign nationals.
  • The applicant should be over 18 years of age. However, nowadays savings account can also be opened for minors by their parents/guardians.

Interest Rate Info

The rate of interest for savings account, in case of most banks, ranges between 3.5 to 7%. For example, Kotak Mahindra Bank offers an interest rate of 6% on salary accounts, whereas, DBS bank offers an interest rate as high as 7% on its savings account. Some government banks also offer an interest rate as low as 3.5% on its savings account. These rates are liable to change based on RBI directive and banks offering higher interest rates often have a higher minimum balance requirement. But, nowadays banks like Kotak Mahindra Bank, DBS and IndusInd Bank provide high interest rates with no minimum balance requirement.

Documents Required to Open Savings Accounts

Nowadays, you can easily open a savings account online without any hassle. To open a savings account online, you just need to submit the details of the following documents online for eKYC:
  • Aadhar Card: Anyone looking to open a savings account online will have to furnish Aadhaar Card number.
  • Pan Card: Any applicant will need to provide Pan Card number along with Aadhaar Card to open a savings account online. Government has made Pan Card and Aadhaar Card mandatory to open a savings account through either channel - online or offline.

You can open your saving bank account online from the convenience of your home. Just follow a simple procedure:
  • Check and compare different banks and their rate of interest and select the one which matches your requirements.
  • You can visit to open a savings account online or visit the website of the bank in which you want to open your saving account. Note: All banks tend to have different online account creation procedure.
  • Fill out the application form for opening savings account and submit it along with your Aadhaar number and Pan number to complete eKYC successfully. Post this you will be able to start using your savings account instantly. Later, banks send their executive to complete your verification. Note: Procedure for opening a savings account online varies from one bank to other.
  • You can also open a savings account in offline mode with minimum documentation. Usually, the bank asks for KYC documents and passport photos along with the account opening form.

The documents to be submitted with a Savings account opening form include:
  • Passport size photographs.
  • Identity and signature proof (Any one) - Passport, Pan card, Driving License, Voter ID card, Aadhaar card, employee identity card in case of government employees. Note: Aadhaar Card and Pan Card are mandatory to open a savings account. Still banks can ask for any other ID proof as well to complete their verification.
  • Address Proof (Any one)- Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/electricity/ water/ credit card bill or Property tax.

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Frequently Asked Questions

Yes. If you want to open an individual savings account, you need to be over 18 years old. However, a minor can be a joint account holder with an adult family member such as parent/guardian.

Yes. All banks provide cheque facility however in case of several public sector banks you do have the option of a basic savings account that does not have cheque facility. In that case, you can only withdraw money by visiting the bank and using a withdrawal slips available at the branch. Additionally, there are mobile only banking accounts such as Digibank by DBS and Kotak 811, which do not feature cheque book facility.

Yes. ATM Debit cards carry an annual fee of approximately Rs.150 plus applicable taxes (varies from one bank to another). However, many private sector banks waive the annual fee provided you use your Debit card for shopping transactions of a specified denomination during the year or you maintain the minimum average balance requirement specified by the bank.

You can check your savings account balance online through net banking, or by visiting the bank or any ATM. Nowadays, almost all banking transactions can be done online and you need not visit the bank for the same. You can access your account online through net banking and also through mobile banking.