A Savings Account offers a safe and convenient place to hold your money. You can use your Savings Account to pay bills and manage your short-term financial objectives. It is also an ideal place to keep aside money for future financial requirements. The best part is that this account enables you to earn interest on the money you hold in it.
Opening a Savings Account is the first step in your personal finance journey. Are you planning to start on this journey? This guide will reveal all you need to know to open and operate a Savings Account easily.
Savings Account: What is It?
A Savings Account is a basic financial service offered by all banks. It’s a type of account where you keep your surplus money to be used as and when required.
This account offers you the flexibility of depositing and withdrawing money easily at your convenience. The interest you earn on the money kept in a Savings Account is automatically credited to your account.
Types of Savings Accounts
Even though a Savings Account is a basic account, there are different types of this account. Some of the common variants of a Savings Account are as follows:
- Regular Savings Account
It is the classic Savings Account, ideal for your day-to-day banking needs. You have to maintain a minimum balance in it.
- Zero Balance Savings Account
As the name indicates, you can use this Savings Account without maintaining any minimum balance.
- Digital Savings Account
You can open and operate this Savings Account digitally. It saves time and ensures convenience by offering banking services through your phone.
- Premium Savings Account
This is a new-age Savings Account where you must maintain a certain minimum balance. You enjoy several perks and advantages when you open a premium account, such as Kotak 811 Edge.
- Women’s Savings Account
This is a specific variant of a Savings Account that is meant for use by women. This account requires you to maintain a minimum balance.
- Salaried Savings Account
This type of Savings Account is designed for corporate employees. Every month, their salary gets credited into this account. There’s no need to maintain a minimum balance.
How to Open a Savings Account?
There are two ways to open a Savings Account: the traditional way and the digital way.
Traditionally, you must visit a bank physically to open your Savings Account. You can open this type of account at any bank.
Digitally, you must connect to the bank website or app through your phone. With just a few clicks on your phone, you can open your Savings Account instantly. This facility is provided by a select category of banks, such as Kotak Mahindra Bank.
You must fill out an application form to open your account, regardless of your choice. You must also submit certain documents, such as proof of your identity, age, address, etc.
Things to Consider Before Opening a Savings Account
A Savings Account’s benefits and features can vary from one bank to another. This can leave you confused about where to open your account. Here are some essential factors to keep in mind when opting for a Savings Account:
- Interest Rate
The Savings Account is considered a low-interest rate payer compared to other investment choices. But you can earn attractive interest rates of up to 7% with banks like Kotak Mahindra Bank.
- Minimum Balance
If you opt for a zero balance Savings Account, you won’t have to maintain a minimum balance. But if you opt for a premium Savings Account like Kotak 811 Edge, you must maintain a minimum balance. Such premium accounts extend a host of benefits to their customers.
- Online Service
Today, most banks offer the convenience of online banking. But, some don’t offer all the services of a Savings Account online. Clarify these things before opening an account.
- Service Charges
Banks levy service charges for various facilities and services conducted through a Savings Account. These include debit card fees, chequebook fees, internet banking fees, etc. Such charges can vary from one bank to another. Get a clear idea about them before making a decision.
- Debit Card Deals
Many banks offer deals through debit cards to gain more customers in the competitive banking market. Such deals can range from reward points to cash-back offers and more. However, some banks also charge an annual fee on their debit cards.
Opening a Savings Account is a simple task. But you have to decide the type of Savings Account you want. Also, you need to select the bank where you want to open your account. If you want an online Savings Account that offers various perks, Kotak 811 Edge is a great option.