SAVINGS ACCOUNT

The savings account is the oldest and most popular type of account for saving money. People often prefer savings accounts because the principal amount remains secure, regardless of the interest earned. Therefore, the advantage of maintaining funds in a savings bank account while accruing interest makes it one of the simplest forms of investment.

What is a Savings Account?

A savings account is like a special bank account where you can keep your money safe and earn extra money on top of it, called interest. It's a really good way to save up for things you want, like a holiday, money for unexpected situations, or even to buy a house someday. Most savings accounts don't need you to have a lot of money to start, and some banks give you more interest if you keep more money in your account. Sometimes, though, there are rules about how many times you can take money out each month, so it's important to check the rules before you open an account.

How Savings Accounts Works? 

Savings accounts are a fundamental tool for managing your money and building financial stability. Here's how they typically work:

• Deposit and Withdrawal: You can deposit money into your savings account by visiting a bank branch, using an ATM, or transferring funds electronically. Likewise, you can withdraw money from your account as needed, either through ATM withdrawals, in-person transactions at a bank branch, or electronic transfers. Example: Let's say you deposit Rs. 10,000 into your savings account. Over time, you continue to add money to your account, bringing the balance to Rs. 50,000.
• Interest Accumulation: One of the key benefits of a savings account is that it allows you to earn interest on the money you deposit. Banks calculate interest based on your account balance and the interest rate offered by the bank. The interest is typically credited to your account on a monthly or quarterly basis. Let's say you have a savings account with a closing balance of Rs. 50,000, an annual interest rate of 4%, and you want to calculate the interest earned over 30 days. Using the formula: Closing balance x Rate of interest x (No. of days / 365). Interest = 50,000 × 4% × (30 / 365). Now, let's calculate:

Interest = 50,000 × 0.04 × (30 / 365)
Interest = 164.38 Rs.
So, the interest earned on your savings account over 30 days would be approximately Rs. 164.38.

• Minimum Balance Requirement: Some savings accounts may have a minimum balance requirement, which means you must always maintain a certain amount of money in your account to avoid fees or penalties. The minimum balance requirement varies depending on the bank and the type of savings account. Example: If your savings account has a minimum balance requirement of Rs. 5,000 and your balance falls below this amount, the bank may charge you a penalty fee.
• Transaction Limits: Some savings accounts may have limits on the number of transactions you can make in a month, particularly for electronic transfers or ATM withdrawals. Exceeding these limits may incur additional charges or fees. Example: If your savings account allows only five free ATM withdrawals per month and you make six withdrawals, the bank may charge you a fee for the extra transaction.
• Online and Mobile Banking: Many banks offer online and mobile banking services that allow you to manage your savings account conveniently from your computer or smartphone. You can check your account balance, transfer money, pay bills, and track your transactions anytime, anywhere. Example: Using your bank's mobile app, you can transfer Rs. 20,000 from your savings account to your friend's account to split the cost of a vacation.

Understanding how savings accounts work can help you make informed decisions about managing your finances and achieving your financial goals. By regularly depositing money into your savings account and taking advantage of interest earnings, you can gradually grow your savings over time.

Savings Account: Features & Benefits

Even though there are so many options to save money, the charm of a Savings Account is still noticeable. Zero balance savings accounts have also got so much attention for their advantage of having the privileges of a savings account without maintaining any minimum balance in it. The features and benefits of Savings Account are as follows

• Safe and secure way to save money
• You can earn interest up to 8% per annum
• There is no minimum balance requirement for zero balance accounts
• Any Indian resident with valid ID proof can open this account
• There are no restrictions on how many bank accounts you can have
• You get ATM withdrawal option and Netbanking
• You can open a joint account with your family member
• Debit card issued can be used for payments

What is the minimum balance for a Savings Account?

The minimum balance required to maintain a savings bank account is subject to change from one bank to another just like the rate of interest. There are mainly two types of savings accounts - regular savings accounts and zero balance savings accounts. Banks have a certain minimum balance limit which an account holder has to maintain else he/she has to pay the penalty.

However, with the changes in other banking products, a savings account has also seen a major shift from being a minimum balance account to a zero balance savings account. Many banks now offer zero-balance savings accounts due to increased demand as compared to the age-old pattern of keeping thousands in the bank account to avoid penalties. The savings account interest rate on these accounts is also high which makes it even more appealing.

List of All Banks Savings Account Interest Rates and Minimum Balance

How to Open a new Savings Account Online

The procedure for online savings account opening with zero balance is very simple through Wishfin. The portal allows a paperless process with no upfront verification. There is an instant approval facility available which makes the zero balance savings account opening process the easiest thing ever. The details required to apply for an online savings account are as follows:

• Full name
• Mobile number
• Email ID
• City

Once the above details are provided, the applicants can compare different banks offering a zero balance savings account with zero balance and then apply for the bank as per their choice. The complete process just takes a few minutes.

Savings Account Interest Calculator

A Savings Account interest calculator can be used to calculate the estimated investment growth over time. It helps you set a goal and then save money accordingly. The calculation can be done by mentioning the annual interest, invested amount, and time period. For a shorter time period, you need to invest more money and vice versa..

Difference between Savings and Current Account

Savings accounts and current accounts share some similarities, but they also have distinct differences. A current account is essential for business owners because it supports a higher volume of transactions compared to a savings account. Most banks do not offer interest on current accounts; however, they do provide easy access to overdraft facilities. Additionally, the minimum account balance (MAB) required for a current account is typically higher than that for a savings account. For a clearer understanding, consider the following basic differences between savings and current accounts.

Thus, savings accounts, especially online savings accounts, is suitable for anyone who wants to earn interest on their deposits. Current account, on the other hand, is preferred by individuals and firms who require monetary transactions on a day-to-day basis. Also, the highest savings account interest rate can be earned on a zero-balance savings account and not on a regular bank account.

Open Zero Balance Savings Account Online at Wishfin

For an online bank account opening with zero balance at Wishfin, the only details required are your full name, mobile number, email address and your residing city. The Wishfin portal allows an instant and paperless process of zero balance account opening online which makes the complete process hassle-free. Once you provide the above information, you can compare the various zero-balance savings account openings from different banks and choose the best zero-balance account online.

Different Bank Saving Accounts with Higher Interest Rates

SBI Savings Account: The SBI online account opening procedure is quite easy as it can be done both on the website and by using the SBI YONO application. SBI account opening online is done at 2.70% interest rates with no limit on the maximum balance. To open an SBI account online, you can visit the official website of the bank or download the SBI YONO application. The SBI new account opening online comes with benefits like safe deposit lockers, a nomination facility, an auto-sweep facility with SMS alerts, and many more.

HDFC Bank Savings Account: HDFC zero balance account opening online can be done at 3%-3.5% interest rate. The HDFC minimum balance for savings accounts can be Rs 2,500, Rs 5,000, Rs 10,000, or Rs 25,000. The HDFC bank zero balance account comes with customized banking service and no annual maintenance charges for the first year. HDFC online account opening is an easy process and comes with safe deposit lockers.

Axis Bank Savings Account: Axis Bank zero balance account can be opened instantly. Axis Bank account opening is easy and you can get your account number instantly. The Axis Bank savings account minimum balance can be Axis zero balance account, Rs 10,000, Rs 25,000, or Rs 1,00,000. The Axis Bank Savings account comes with an interest rate of 3.00% to 3.50%. The Axis Bank online account comes with an auto FD feature for balances above Rs 10,000.

ICICI Bank Savings Account: The ICICI zero balance account will get you the added benefits of an ICICI EPF account. The ICICI zero balance account opening online can be done instantly and you can choose your own account number. The ICICI bank zero balance account comes with mobile banking and contactless mobile payments. The ICICI bank account online comes with an interest rate of 3% to 3.5%.

Bank of Baroda Savings Account: The Bank of Baroda online account comes with the benefit of a zero balance account. The Bank of Baroda online account opening minimum balance can be Rs 500 or Rs 1000. The Bank of Baroda zero balance account comes with an interest rate of 2.75% to 3.35%. The Bank of Baroda account opening comes with the benefits of an unlimited chequebook facility and a free debit card.

Kotak Mahindra Bank Savings Account: The Kotak Mahindra Bank account opening has a digital bank account. The Kotak Mahindra Bank online account opening can be done 24/7 through the Kotak 811 plan. The Kotak Mahindra Bank zero balance account opening online can be done instantly with the help of your Aadhaar card, at interest rates of up to 4%.

Union Bank Savings Account: The Union Bank of India account opening can be done at an interest rate of 2.75%. The Union Bank of India savings account comes with added benefits of free accidental insurance, banking facilities, reward points on debit card spend, free ATM and many more.

Types of Savings Account

In India, there are several types of savings accounts tailored to meet different needs and preferences. Here's a detailed overview of some common types::

1. Regular Savings Account

• This is the most basic type of savings account offered by banks in India.
• It allows customers to deposit and withdraw money as needed.
• Regular savings accounts typically offer lower interest rates compared to other types of savings accounts.

2. Salary Savings Account

• Salary savings accounts are specifically designed for salaried individuals.
• Employers often use these accounts to directly deposit employees' salaries.
• They may come with additional benefits such as zero balance requirements, higher transaction limits, and special offers on loans and credit cards.

3. Senior Citizens Savings Account

• Senior citizens, typically aged 60 years or above, are eligible for this type of savings account.
• Banks may offer higher interest rates and additional benefits such as priority service and discounts on certain banking products.
• Some banks may also provide facilities like doorstep banking and health insurance coverage.

4. Women Savings Account

• Women's savings accounts are designed to cater to the banking needs of women.
• They may offer benefits such as higher interest rates, cashback rewards on transactions, and discounts on shopping and lifestyle products.
• Some banks provide features like free insurance coverage and financial planning services tailored for women.

5. Digital Savings Account

• With the rise of digital banking, many banks offer digital savings accounts that can be opened and managed entirely online or through mobile apps.
• These accounts typically offer convenience, with features like instant account opening, paperless transactions, and 24/7 access to banking services.
• Digital savings accounts may also come with higher interest rates and lower fees compared to traditional accounts.

6. Joint Savings Account

• A joint savings account can be opened by two or more individuals, such as spouses, family members, or business partners.
• It allows multiple account holders to deposit and withdraw money jointly.
• Joint savings accounts are useful for managing shared finances and achieving common financial goals.

7. Specialized Savings Account

• Some banks offer specialized savings accounts tailored for specific purposes, such as education, healthcare, or retirement savings.
• These accounts may come with features like tax benefits, higher interest rates, and investment options suited for the particular savings goal.
• Before choosing a savings account, it's important to compare the features, benefits, and charges associated with different types of accounts offered by various banks. Additionally, consider your financial goals, transaction preferences, and eligibility criteria to select the account that best suits your needs.