Opening a savings account looks easy with the myriad of options available in the market. But, when it is about zeroing on an account that meets your needs, things can be tricky. How do you choose which savings account is ideal for you? Let’s look at some of the factors to consider when choosing a savings account.
Rate of Interest
The interest rate bank is offering should be the most important consideration for you when Choosing a Savings Account. RBI has allowed banks to set interest rates as per their choice. Most of the banks offer interest rates between 4% per annum to 6.25% per annum.
Some banks offer different interest rates depending upon the savings account balance. Higher the balance, better the interest rate. So, when you are looking for a bank to open a savings account, do check the interest rate and terms and conditions on that.
It is important to check if the savings account you are about to open is a zero-balance or minimum balance account. If you have to maintain a minimum balance in the account, the bank will levy a penalty in case the account falls below the minimum requirement. It always makes sense to open a zero balance savings account.
Transaction and Other Charges
Check the terms and conditions of the bank to find out if there are any transaction or service charges applicable. Most of us ignore these charges, but when combined, it could be a significant amount. Also, ask if the bank levies charges on the overseas bank transfer. Inquire about the cap on the number of free ATM withdrawals on a per month basis.
Offers on Debit Card
Some banks offer freebies such as free cheque books, discounts on groceries, movie tickets, etc., if you make a debit card payment. Some of these freebies can save you money. Check out the offers on the debit card given by the respective bank.
The digital banking experience offered by the bank should be good enough to give you a hassle-free experience. Some of the banks have a poorly designed user interface with limited features in digital banking. This makes the whole thing confusing for the user. Some of the basic functionalities that must be in the digital banking platform include checking account balance, getting account statements, third party transfer, open FD, PPF, pay utility bills etc.
Branch and ATM in the Area
The bank should have a branch and ATM facility in your vicinity. With a branch nearby, you can always visit to make a demand draft, get your account updated or for any other help. Similarly, having an ATM close to your place means you can withdraw the money without wasting a lot of time. Also, you will not have to pay extra charges levied by a non-bank ATM on exceeding the number of withdrawals.
The bank should also have the facility of opening a partner savings account or joint savings account, as it comes in handy in the long run. Now when you know all the factors to consider when opening a savings account, we hope that you will keep the above-discussed pointers in mind and choose the right bank.