A savings account is the most basic service a bank offers and an excellent short-term investment option to help you earn interest on your savings. The funds in this account can be accessed by you from anywhere and at any time, making it a reliable, safe, and stable investment choice to store your funds for a short time.
Read further to understand how to open a savings account online and offline, along with the required documentation and eligibility criteria.
How Do Savings Accounts Work?
Along with savings accounts, other investment accounts like fixed deposits are a crucial source of funds for every financial institution. These institutions then use the saved money to provide loans to everyone else.
Almost every traditional and digital bank offers different types of savings accounts. All you need to do is to start depositing money into the bank account. Then these financial institutions will start paying you interest rates on the savings you make, either yearly or quarterly. These rates vary from bank to bank.
Documents Required to Open a New Savings Account
An individual needs to show any one of the below government-approved identity proofs:
- Aadhar Card
- PAN Card
- Voter ID
- Bank Passbook
- Employee ID
- Ration Card
- Driving License
Government-approved address proof validates your address. You must submit any of the below documents as address proof:
- Ration Card
- Utility Bill (light, gas, water, telephone – not older than two months)
- Letter from Recognised Public Authority
- Bank Passbook
- Voter’s ID
In addition to the above valid proofs, you must submit two passport-size photographs and the online account opening form available from the bank’s website or physical branch.
What are the Eligibility Criteria for Opening a Savings Account?
Eligibility criteria will differ for different banks depending on what type of savings account you choose to open. However, here are the most common requirements:
- The account holder should be an Indian resident
- You should be above the age of 18, although parents or guardians can open a savings account on behalf of a minor
- You should have proper government-approved proof
How to Open a Savings Account Online?
Step #1: Choose a Bank
If you have not already selected a bank you want to trust your money with, this is your time to get started. Today, banks offer all different types of savings accounts to provide you interest on your savings. Some private sector banks offer higher interest rates than the standard 4%. Similarly, a high-yielding digital savings account will offer higher interest rates than average so do proper research and compare the options you have.
Step #2: Keep Required Documents Handy
After selecting the bank, make sure to keep all the required documents mentioned above handy.
Step #3: Fill Out the Online Application
Go to the bank’s official website and fill out the online application with your personal information. Ensure you are doing this step under a secured network connection to reduce your chances of a cyber breach. The personal data required would be:
- Information from your required documents
- Date of birth
- Contact information
Alternatively, you might receive a reference number, and a bank representative will be assigned to take things further.
Step #4: Get Started by Funding Your Account
Once you open your savings account online, you are required to deposit a certain amount of money to activate your account. You can transfer the fund from your existing account or can fund with a cheque.
How to Open a Savings Account in Your Nearest Bank Branch?
If you are too paranoid to trust the internet and open a savings account online, you can still visit the nearest bank branch, if your bank has one. Here’s what you will need to do:
- Don’t skip the research! It’s vital to research since many banks offer different types of savings accounts and provide exclusive benefits. So, search for a savings account that aligns with your goals and vision.
- Once you have chosen the one, visit their branch along with the necessary documents like original copies of identity and address proof for verification and passport size photographs.
- You will be given an application form that needs to be filled out and submitted with the documents.
- Then the bank will verify everything and open a savings account within the specified time.
What Features to Look for in a Savings Account?
Banks offer various savings accounts to serve the different needs of their customers. Apart from the regular savings accounts, there are salary accounts, kid’s savings accounts, women’s savings accounts, senior citizen’s savings accounts, and others. One of the key features of a savings account is that the funds can be withdrawn whenever needed.
If you are looking to open a new savings account in a bank, here are some questions to ask to ensure you get all the essential features to make the most of your savings bank account.
1. What Is the Interest Rate Offered?
Usually, all banks offer a nominal interest rate on the money deposited in a savings account. Most banks will give you interest between 3 to 7% depending on the repo rate and reverse repo rates set by the Reserve Bank of India. The interest you earn on your money in a savings account helps you grow your money over the years. When exploring the market for a savings bank account, check the interest rate your bank offers and compare it with other available savings accounts. You can also open a savings account with Freo Save and get 7% interest on your money.
2. What Is the Minimum Balance Required?
Most banks have a minimum required balance that savings account holders need to maintain in their accounts. The minimum balance required by banks differs according to the type of savings account you choose. For example, salary accounts are called zero-balance savings accounts because they do not require any minimum balance. If you fail to maintain the minimum balance in your account, your bank may penalise you.
3. Are There Any Account-Related Fees?
Your bank may impose low-balance fees, annual or monthly maintenance fees, dormancy or inactivity fees, or ATM fees in some categories of savings accounts. Read the fine print to check for any account-related fees in your bank. It is always best to clarify account-related costs beforehand.
4. Is There Any Age Limit for the Account Holder?
Typically, savings bank accounts have no age bar, but that might differ depending on the categories of savings accounts. Each type of savings account has specific eligibility requirements, but usually, these accounts are designed to be suitable for people of all ages. Check with your banker about any age limit or age-related eligibility attached to your account.
5. Does the Bank Allow Online Transactions and Net Banking?
One of the key features of savings bank accounts is that it enables you to transfer your money online. But you may need to apply for it separately, so it is advisable to discuss this feature beforehand. All banks and neobanks offer net banking facilities to all savings account holders with which they can send, receive, and invest their money online. You can also use net banking to pay bills, choose insurance facilities, and order a cheque book among other things. Talk to your bank about online transactions and the net banking feature in your savings account.
6. Does the Bank Provide a Debit Card?
In most banks, your savings account welcome kit comes with a debit card and chequebook. Using a debit card, you can withdraw money from an ATM and make payments on online and offline platforms. You will need to visit an ATM to activate your debit card. However, before opening a savings account, discuss the details of the debit card they will provide. Some neobanks also offer digital debit cards. Understand the debit card features you will receive and how to use them.
Get Started with the Right Savings Account!
There are various benefits of opening a savings bank account in India. Some key features of savings accounts are that it keeps your money safe, allow you to transfer funds online in a short time, there is no age restriction, you can open an account jointly with a loved one, and the charges are nominal. But, whenever you take the first step to open a savings account in a bank, make sure you ask the right questions to make the most of your banking partner!