Saving is a valuable habit that everyone should develop from a young age. The best place to keep your savings is in a government-recognized bank. Nowadays, banks offer a variety of savings accounts tailored to different needs. For example, you can choose from regular savings accounts, digital accounts, joint accounts, or current accounts. The Government of India also provides special zero-balance savings accounts. In this article, we will explore the different types of savings accounts available in India and their features.
Regular Savings Account
Anyone who has a bank account probably has a Regular Savings Account. This is the most basic type of account you can open. If you choose to open this account, you typically have to maintain an average monthly balance, which can be as low as INR 500 or higher, for instance, INR 10,000. You also get nominal interest, ranging from 3% to 6%, along with other basic facilities like an international ATM cum debit card, cheque book, internet and mobile banking platforms, etc.
Zero Balance Savings Accounts
A popular Savings Account among the employed population is a Zero Balance Savings Account. It is also known as a Salary Account. Essentially, your employer opens this account for you to deposit your monthly salary, incentives, bonuses and other kinds of financial rewards that go with your employment. As is apparent from the term ‘zero balance’, you are not obligated to maintain any minimum balances in this account. You typically get an instant kit with a debit card and net banking details. In recent years, the Indian Government has started offering Zero Balance Savings Accounts, which are not necessarily Salary Accounts to people from economically weaker sections.
Digital Savings Accounts
Since we live in a digital world, it only fits that you have a Digital Savings Accounts. This account works like your Regular Savings Account but does not include any physical paperwork regarding bank details. You get a digital debit card, which you can use for all sorts of transactions and purchases. You can store the digital card on your internet-enabled mobile phone and swipe at retail outlets too. So even if you step out of your house without a wallet, you can still access money with your Digital Savings Account.
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Joint Accounts
Many families like to pool their savings together in a single account. Such people can open a Joint Account, which is another type of Savings Account. Such accounts operate on an “either” or “survivor” basis. This simply means that the signatories can be either one or all of the joint account holders. Most Indian banks allow up to four people to be named Joint Account holders on a single account. Also, with such accounts, each account holder linked to a single account would be eligible for their ATM-cum-debit card. With Joint Accounts, you get all the basic facilities you would, with a Regular Savings Account.
Senior Citizens Savings Accounts
Senior citizens, typically retired individuals aged 60 and above, often have limited income sources but face higher expenses. They generally prefer safer investment options to protect their savings. To cater to their unique needs, banks offer Senior Citizen Savings Accounts. These specialized accounts provide added benefits, including an extra 0.50% interest rate on savings, basic health and accidental insurance coverage, and other investment-related perks, ensuring that seniors can securely and efficiently manage their finances.
Savings Accounts for Children
A type of Savings Account that all parents and guardians must open for their children or wards is a Savings Accountfor minors. You have to name the child as the primary account holder in such an account, and as the parent, you can be the secondary account holder. You can deposit the cash gifts your child receives during their formative years in this account as a means of creating savings for them. Like with a Regular Savings Account, your child can earn interest on the savings parked in this account. Banks also provide debit cards in the name of the child (on the parents’ request). Once the primary account holder turns 18, this account can be converted into a Regular Savings Account.
Privilege Accounts
Many banks in India have started offering privilege accounts. These are accounts where you get higher interest rates on the savings parked. However, you need to maintain high minimum monthly balances to get higher interest rates. Typically, you have to keep at least INR 100,000 at all times in these accounts to be eligible for the high interest rate. These accounts also come with complimentary benefits such as higher daily withdrawal limits, unlimited access to airport lounges, international ATM-cum-debit cards with preferential forex rates, and so on.
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With so many different types of savings accounts to choose from, you can open multiple accounts to suit your needs. Moreover, today, you can open these accounts online without stepping foot in the bank. Simply visit the website of your preferred bank, fill an online form and submit copies of your ID and address proof documents. You will receive your account opening details via post in a few days, after which you can start depositing money. It is that simple!
