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Types of Savings Accounts: Which One is the Best for You?

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A savings account is one of the most straightforward concepts to understand in the financial dictionary. It goes like this: you make an account where you save some portion of your monthly income and, each year, interest rates will be added to it.

However, depending on different banks, you get various savings accounts with multiple benefits, features, eligibility, etc. Sometimes, they even offer these accounts under the name of government schemes.

Let’s explore ten different savings accounts and their benefits!

10 Types of Savings Accounts

What makes different types of savings accounts differ from each other is the existence of their distinguishing features. Every type of savings account is different in terms of what it offers and what it’s designed to do.

Ask these questions to help you figure out what type of savings account is best for you:

  • How much interest will I earn from this savings account?
  • Does this account require a minimum deposit amount?
  • Will I gain tax benefits with my savings account?
  • Am I going to have a 24×7 accessibility?
  • Do I have to pay penalties for withdrawals?
  • Are there any fees for opening a savings account?
  • Will this account satisfy my financial goals?

Once you have these questions ready, it will be easier for you to understand the reason for the existence of different savings accounts. Without wasting another minute, let’s know the different types of savings accounts.

1. Zero Balance Savings Account

Usually, when you open a savings account, the bank has set a specific amount limit that needs to be maintained. For example, some banks have the requirement of maintaining a minimum amount of ₹5,000; if you don’t maintain it, you’re liable to pay the maintenance fee.

In contrast to this concept, a zero-balance account does not mandate you to have such requirements in order to maintain the account. Officially known as the Basic Savings Bank Deposit (BSBD), users are encouraged to save more with this account.

In India, Freo Save is the first neobank that offers you a 7% interest rate on your zero-balance savings account. Apart from this, you get other benefits like safe and secure banking facilities, insurance on balance, and 100% guaranteed data security! Moreover, after opening a savings account on Freo, you unlock other Freo credit and shopping options like app-based credit line MoneyTap, and the “shop now, pay later” module from Freo Pay.

Get Started with Your Zero-Balance Account Today!

2. Regular Savings Account

A regular or traditional savings account is perfect for people who want to save money on both short and long-term basis without being concerned about the best interest rates. This is the type of account you initially begin with when you start your financial independence journey.

You earn interest rates; however, they are lower than other accounts. Moreover, there’s a limit to how many monthly transactions you can make. Usually, banks allow monthly six account withdrawals before facing penalties.

3. Women’s Savings Account

Meant for today’s independent women, a women’s savings account keeps in mind the different needs of a modern woman. From enjoying a wide range of exciting features to special rewards and shopping benefits, it unlocks a range of exclusive benefits.

Apart from this, some banks offer women access to lower processing fees, cashback offers, home banking services, cash delivery and pick-up, cheque delivery, unlimited withdrawals, accidental cover, and other benefits usually not seen in a normal savings account.

4. Kid’s Savings Account

Teaching your kids the importance of money from an early age is important. There’s never a right age to make your child financially knowledgeable; in fact, it’s preferred to start at a young age.

Opening a kid’s account is the perfect solution to teaching your child how to manage money, save for the future, and learn other vital aspects of personal finance. However, before opening one, ensure you conduct proper research. Since every bank provides different interest rates and benefits, it’s important to look through and decide which one is the most beneficial to you.

You have to be above 18 to open a savings account; however, with a kid’s account, a parent can open it on their child’s behalf and operate it. You get benefits such as free passbooks, e-statements, debit cards, and insurance.

5. Senior Citizen’s Savings Account

The Indian government has offered a Senior Citizens’ Savings Scheme (SCSS) that aids the elderly in saving for their retirement while getting paid quarterly interest.

Individuals above 60 can open this account and get the endless benefits of long-term financial security with attractive features. Several other advantages include:

  • Tax benefits
  • Premature withdrawals
  • Opening more than one account by yourself or a joint account with your spouse
  • Adding nominations while opening the account or after opening an account
  • Five years maturity period that can be extended by three more years

6. Family Savings Account

This is just a regular account where every family member can have single accounts grouped. Here, the maintenance will be on a group level, so you don’t have to maintain a balance on every single account.

Many banks offer different benefits, such as discounts on gold lockers, Demat accounts, debit or credit cards, etc., at a lower interest rate.7.

7. Salary-based Savings Account

Your employers usually set up salary savings accounts. They don’t have a minimum balance, and you will typically receive your salary directly in this account. If the account is not credited with salary for more than three months, it is converted into a regular saving account with a minimum balance requirement.

8. Health Savings Account

Some banks can help you save money for your health in the future. In case of hospitalisation or emergencies, you can settle a reimbursement through a health savings account.

This account includes pre- and post-hospitalisation charge coverage, day-care treatment, cashless transactions, etc.

9. Student’s Savings Account

In college, you can start saving early and learn the importance of personal finance with a student’s savings account. This account is perfect for cash-strapped students since it offers easy access to cash and low fees with less to no minimum balance requirement.

Since this is a youth-focused account, banks keep digital experience on priority. Some even offer a certain daily withdrawal limit. While other banks provide benefits such as free chequebooks or ATM cards.

10. Business Savings Account

While many business owners opt for current accounts with no daily withdrawal limitations to handle their business needs, you also have the option to choose a business savings account.

You can build and maintain a steady cash flow that can suffice emergencies, save for future business investments, and handle the impacts of big annual tax payments.

Freo Save – One Savings Account for All!

Nowadays, banks come up with exciting benefits packages wrapped under different savings account names. However, if you compare the above types of savings accounts, you’ll realise they all serve the same purpose of future saving with little variations in benefits and features.

Amid all these benefits, a higher interest rate is what everyone searches for ultimately. Today, Freo Save is proud to be India’s first neobank to offer a 7% interest rate per annum on our zero-balance savings account! On top of that, you’ll get this alluring benefit regardless of being a woman, salaried employee, senior citizen, or child.

Open a Zero-Balance Savings Account Today to Get Great Benefits!