Planning to open a savings account? Kudos, you are taking a crucial step towards managing your finances. When it comes to taking responsibility for your financial goals, savings accounts are an excellent starting point. You can even choose to have more than one savings account in more than one bank for different savings goals.
Opening an online savings account is a breeze. All you need to do is visit your bank’s website, choose the type of savings account, and complete the KYC by providing your PAN and Aadhar. The entire process is 100% digital and requires zero paperwork.
But, before you open a new savings account, you should know that you have plenty of choices. Most major Indian banks offer variants of savings accounts, which come with their own terms and conditions, perks, and benefits. So, it is wise to research and plan before sealing the deal.
To help you make an informed decision, here are some features you should look for when opening a savings account.
#1 Interest rates
Savings accounts are interest-bearing accounts, so research and compare banks that offer high-interest rates.
If you have a financial goal and want a savings account exclusively to set aside funds for it, choose a high-yield savings account.
#2 Opening Amount and Minimum Cash Balance
When you apply for it, your bank may ask you to deposit some amount to get started. This amount is called the opening amount and can vary among banks.
Your minimum cash balance is the least amount of money present in your bank account during a month. If you fail to maintain the minimum cash balance in your savings account, your bank will charge you a penalty. If you keep the balance below the minimum requirement for several months, your penalty can add up!
So, before you open your savings account, make sure you know the minimum cash balance criteria. For most banks, it is Rs. 10,000.
But what if you don’t have adequate savings yet? In that case, you can open a zero balance savings account. However, with a zero-balance account, you can only make four withdrawals for free during a month. So, open this account if your primary objective is to deposit money.
#3 Availability of In-Branch Banking Services
Most banking services are now conveniently available as web-based applications such as net banking or mobile banking. But you need to visit the branch in person for some services and transactions.
In such scenarios, it is advantageous to have a relationship with a bank with a widespread network.
#4 Service Charges
Certain banks levy additional charges for SMS alerts, issue of updated ATM cards etc., every financial year. So, before you open a savings account, make sure you read your bank’s terms and conditions and make a note of these charges.
Choose a bank that offers transparency, imposes a minimal fee, and has no hidden charges.
#5 Debit Cards
Most banks offer deals on their debit cards, such as cash-back offers, discounts on partnered brands, and other perks. But here is the catch: the banks may levy annual fees on their debit cards. For instance, banks offer variants like gold and platinum debit cards, which have several benefits but often cost a yearly fee that gets debited automatically.
So, while opting for a debit card, read about the fees and charges you will have to pay.
Before applying for a savings account, it is wise to research and compare interest rates among banks. Note the minimum cash balance requirements, and check whether the bank has a branch in your area.
And before you select a debit card variant, check the overhead costs associated with it and be wary of hidden charges.