The makings of a Savings Account: A look at everything needed

The must-have and good-to-have features of a savings bank account

We have all opened a savings account and are probably familiar with the term and its uses in a broad sense. While all of us have been operating savings accounts, we may not have paid attention to the various benefits attached to this simple banking account.

In this article, we try to cover the features generally included in all savings accounts available in all the banks operating within India. 

1. Savings account – the lifeline of all financial transactions!

A savings account is the bare minimum if you need to transact conveniently. Often cash transactions, especially of a higher volume, may become cumbersome and quite risky. There is also no legal record if cash exchanges hands; hence, transacting through a bank account is convenient and legal evidence. The entire world of e-commerce and digitised payments predominantly works on a savings account. A savings account is typically mandatory for making any investment or even for borrowing from banks.

2. Provides nominal interest rates

Savings bank balance has to be maintained for liquidity purposes. Often, this is not considered an investment. However, there are innovative and competitive products available in the market that offer decent (albeit nominal as compared to other investment avenues) interest rates on the savings bank account.

For example, the IDFC FIRST Bank Savings Account offers monthly interest credits, translating to up to 7% p.a. The interest extended is compounded, making it even more attractive. 

3. Minimum average balance

Savings bank accounts are designed for liquidity and hence, typically have a mandate for holding a minimum average balance. The average balance could range between Rs. 10,000 to Rs. 25,000. In not maintaining the minimum average balance, many banks charge the customer a certain percentage as a penalty.

At IDFC FIRST Bank, there are no penalties applicable for the non-maintenance of this minimum average balance. Some of the transactions may be charged by the bank at a nominal cost. However, savings accounts, typically salary accounts, are generally exempt from this minimum balance clause. This type of savings bank account is called the zero-balance account. IDFC FIRST Bank's Pratham Savings account is a zero-balance account.

4. Add-on facilities

Apart from the usual passbook, chequebook, and debit card facility, many banks offer Demat accounts alongside savings bank accounts which can be used conveniently for investments in equity and debt markets. There are other banks that also provide locker facilities alongside savings bank accounts to facilitate the safekeeping of documents, gold, and other precious items. While the basic add-ons such as passbook, chequebook, and often debit cards are extended without a fee, the rest of the add-ons come at an additional cost. 

5. Savings accounts are accessible for all!

Being the lifeline of the financial system, it is only fair that a savings account has an eligibility criterion that everyone can qualify. However, most banks painstakingly design their products to align with the requirement of the set of audience that they want to cater to. IDFC FIRST Bank has nine different types of savings accounts that cater to various audiences, including minors, senior citizens, NRIs, women, etc.

To conclude, Savings bank accounts have become more relevant with the digitisation of India. They are also the primary reason for achieving cashless and contactless transactions.

There are minor yet meaningful variations in the savings account, which could increase your delight factor as a customer. Thus, it becomes essential to spend some time and open a savings account that aligns with your needs and provides facilities that add to your experience. With IDFC FIRST Bank, you get monthly interest credit on savings with multiple other features. To know more, click here.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.