What is Savings Bank Account?
Whether you are a student, homemaker, business owner, salaried employee or a senior citizen, a Savings Account is just what you need to manage your money more efficiently.
From regular savings accounts to premium accounts with personalised services, most Banks offers customers different types of savings accounts to cater to every customer’s unique and diverse needs.
Get 24×7 access to your savings bank account through bank’s unique digital platforms – NetBanking, Mobile-Banking & a network of branches and ATMs
Open a savings account with your nearest Bank today and transform the way you bank!
Suitable to every Indian citizen who want to invest a portion of savings and make transactions to meet short term needs and contingencies.
Those who wish to remain invested for medium or long period with the intention to make high returns.
- Risk: If the bank liquidates, balance cum interest upto 1 lakh is exposed to risk.
- Returns: A fixed rate of min. 3.5% compounded biannual up to 1 lakh, above which the rate varies.
- Taxation: Under Section 80TTA, the interest is exempted upto Rs. 10,000 p.a., above which it is treated as “income” and taxed accordingly.
- Lock-in Limitations: Account remains active as per requirement.
- Withdrawals: ATMs, NEFT, RTGS, UPI and IMPS enables high liquidity of funds
- Capital Protection: The safety of investment is limited to Rs. 1 lakh.
- Inflation Protection: When(if??) inflation is above interest, the account earns no real returns.
Rendering automatic access to investments, savings and loans makes it an essential reason to open an account and gain several features to use cash flows optimally.
Residents of India and Non Residents (Clauses apply)
|Fee Structure (Account Opening Fee & Maintenance Charges)||
|Tenure||Account remains active until closed.
|Exit Option||Anytime during bank’s working hours.
|Account Holding Categories||
|Nomination facility||This provision is available.|
Capital & Inflation Protection
Your capital is not completely safe as a sum of maximum 1 Lakh only is insured by the DICGC.
There is no protection when the rate of inflation is more than the rate offered by the savings bank account. Hence, the account earns no real returns.
As per the Reserve Bank of India, the banks are free to determine the interest rates which is guaranteed up to 1 lakh, but varies for accounts with higher balance.
The account is highly liquid as withdrawals and transfers can be made through ATMs (Automatic Teller Machine), NEFT (National Electronic Fund Transfer), RTGS (Real Time Gross Settlement), UPI (Unified Payment Interface) and IMPS (Immediate Payment Service).
- Under Section 80TTA, the interest is exempted upto Rs. 10,000 per annum for an individual or a Hindu Undivided Family (HUF).
- However, the interest amount above this limit is treated as income and taxed accordingly under the head ‘income from other sources”.
- No Tax Deducted at Source (TDS) is taken from this account.
Account Setup Information
How to open?
An account can be opened in any nationalised, private-sector or foreign bank with documents including:
- Account opening form.
- Passport size photographs – two
- Aadhar card or acknowledgement of application in its absence.
- Address and Identity Proof (PAN, Aadhar, Driver’s License, Voter’s ID or Ration Card)
How to operate?
The account holder receives a passbook with their photo affixed. Some private and foreign banks deliver an account statement instead of a passbook. An initial amount must be credited as an opening sum. Various transactions available include : cash, cheque, demand draft, money transfers and ECS (Electronic Clearing System).
- E-banking or internet banking is offered by most banks today to enable convenient and portable access to the account.
- It allows you to pay bills, transfer money, do online shopping and manage other accounts in the same bank.
- It is allows you[repeat] to venture into new platforms like investment in stocks, purchase of insurance, tax payments, etc. made available by the bank.
- You can always rely of the savings bank account for your daily expenses and immediate needs in a reliable and convenient manner.
- Banks cater to diverse groups by packaged accounts such as children’s account, accounts for women, senior-citizen accounts and privileged banking.
- The Government of India has made a provision for the poor to gain access to banking services under the account “Pradhan Mantri Jan Dhan” that can be opening with a zero balance.
- Keep note of the balance in your account as it is subjected to penalties when:
- It falls below the minimum required sum
- Cheques or ECS transfers are dishonoured.