What makes Savings Accounts unique?

One of the Bank Accounts we have ever opened is a Savings Account. Whether an account we open as a minor, with parents, or as an adult, a Savings Account develops a sense of financial discipline and encourages us to save money from a young age. Yet, most people use these accounts for basic transactions like cash deposits and withdrawals because they are unaware of their features. 

Following are the reasons why Savings Accounts are unique: 

Easy transactions

The best part about modern-day accounts is that you can access them anytime, anywhere. This gets attributed to the fact that all banks today offer Internet and Banking apps. You only need to do an online Savings Account opening by visiting the bank portal or downloading the app. This enables you to send and receive payments quickly.

Swift bill payments and online shopping

You can use your online Bank Account to pay all your utility bills. Bills can be paid in cash, cheques, or through online transactions. You can use Internet Banking channels to pay for your online shopping orders, eliminating the need to operate these transactions via cash. 

Debit and ATM Cards

When you open a Bank Account, your bank typically offers an account opening kit. This includes two essential elements: Online Banking details and ATM or Debit Card. Those uncomfortable with online transactions can use their Debit Cards or withdraw cash. You can also use it to shop online and from retail stores, and the money gets directly debited from your account. 

Balance maintenance

This is an essential or basic requirement of any Saving Bank Account. Banks typically decide the minimum amount you should save in the account, failing which you are charged a penalty. If you hold an account in a public sector bank, you may need to maintain a minimum balance of Rs. 1,000. Private sector banks, meanwhile, require a minimum balance of Rs. 10,000 to Rs. 1 lakh, 

That said, there are unique Zero-Balance Accounts, also called Salary Accounts, in which there is no mandate on minimum balance. 

Interest rates

The savings parked in your account are also eligible for interest. Depending upon the bank where you hold the account and the amount parked, you earn reasonable Savings Account interest rates. While the interest rates are not too high, it is still a bonus offered by banks and disbursed once or twice a year. Generally, banks offer interest rates of 3.5% to 7%, depending upon the account type and balance you maintain. 

Deposits and withdrawals

Generally, there is no specific limit on the money you can deposit in your account. However, banks have a withdrawal limit and withdrawal frequencies. In most cases, you can make up to five monthly withdrawals. Also, there is a limit on ATM withdrawals wherein you can use your bank ATM and other bank ATMs a couple of times a month. In case you use another bank’s ATM over the prescribed limit, you get charged a penalty.