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Bank Savings Account – Types, Account Opening & Documents Required

A person who thinks about his/her future saves money for the future purpose. Saving money is a good habit. Future is uncertain for everyone. One has no idea what future lies for him/her. One should be penny-pinching in order to save money. Everyone should be economical when it comes to money. Rather than saving the money in the treasure box or chest, he should credit the money to the Bank Savings Account.

There’s a famous quote said by a famous author, politician and political theorist named Benjamin Franklin

Beware of the little expenses; a small leak will sink a great ship

The Government of India has introduced many saving schemes like Postal savings, Bank Cumulative Time Deposit, Defense Fund, National Savings Certificate, Life Insurance and much more. Many of them are adopting these schemes and people should take the advantage of these schemes provided. In this article, we are going to know about what exactly a bank savings account is, how does it perform and how to apply for it and what are the benefits of opening a bank savings account.

Firstly, What exactly do you understand by a Bank Account? A Bank Account is basically an arrangement or a set up created by the bank in order to deposit or withdraw cash with some paid interest reserved by the Bank. The Bank Account is classified is classified by different types of accounts which perform different activities

  • Savings Account
  • Current Account
  • Recurring Deposit Account
  • Fixed Deposit Account
  • Sweep Account

Savings Bank Account

A savings bank account is the simplest form of the Bank account that allows you to save a certain amount of cash anytime along with earning an interest on your money. Believe it or not, it’s the smartest way to save your savings. Cash kept in the savings account are less accessible. When you are conserving your money in the bank wallet it is adding up and earning interest in the savings account.

In other words, you are lending your money to the bank so that the bank in return offers you with different benefits and loans to the other customers and it is paying a little bit extra than your original amount.

There are a few types of savings account to choose according to your necessity.

Basic Savings Account

This type of account offers a low rate but keeps your money safe and secured and gives you a quick access in case of an emergency purpose.

The Money Market Account

This requires a higher minimum balance and in returns offers a better rate. This account might come with a debit card or cheque facility and has a limited transaction per month.

A Certificate of Deposit

This holds money for a fixed period of time. This savings account provides the highest annual percentage yield. The longer you freeze your cash in the account, the higher the interest rate. Withdrawing money before the end of the term can charge you with a penalty.

Pradhan Mantri Jan Dhan Yojana (PMJDY)

This is a National Money Saving Scheme or it’s a National Mission introduced by the Government of India to provide access to various financial services like availability of basic savings account, providing remittance facilities, insurance and providing pensions to the excluded sections of the society like the weaker sections and the low-income earning groups.

Current Account

A Current Account is basically known as the trading account. These accounts are mainly opened by those individuals and entities who focuses on business purposes like involving in the daily transactions, multiple payments, and receipts to the business firms, traders, entrepreneurs etc. The Current Account is the ideal solution for this purpose. Current account can be opened in the name of  the following

  • Individuals
  • Two or more individuals (Joint Account)
  • Partnership Firms
  • Proprietary Concerns
  • Hindu Undivided Family
  • Associations, Trusts, and Clubs
  • Private and Public Limited Companies
  • Government Departments, Boards, and Corporations etc.

Fixed Deposit Account

The Fixed Deposit Account is a type of account where the money is deposited for a certain period of time say it like- for six months/ one year/ five years/ ten years. The money once deposited cannot be withdrawn before the expiry of the time period.

Recurring Deposit Account

These are the type of account that is provided by the bank which is quite helpful for the people in terms of saving money. This deposit scheme helps the people with regular incomes to deposit a fixed amount every month and earn interest at the different rates provided by the bank. A delay in regular payments will result in the deduction of the interest payable at the maturity. They also provide the loan facility on the recurring deposits to their customers and can take up to 90% of the deposit value.

Sweep Accounts

The Sweep Accounts are the types of account that automatically transfers the amount that exceeds a given threshold to the fixed deposit account. Whenever the cash is needed the bank can just transfer and “sweep” in funds to the savings account.

NRI Savings Account

An NRI Savings Account that is opened in India will allow the account holder to safely deposit the funds that come from the foreign earnings. The funds that are deposited into the NRI Account are converted into INR  or Indian Currency. This activity of converting a foreign currency to Indian currency allows an NRI to maintain the foreign currency earnings in Indian Rupees. The funds that are collected as well as the interest earned on the NRI accounts are free from the tax and account holders can retreat the money anytime.

  • To apply for an NRI Bank you need to visit the official site of the bank where you want to open the account. An option of NRI  Bank Accounts is available with sub options like- Savings Account, Current Account, Deposits etc.
  • Choose the Savings options which directs you to apply online. When you click the option of “apply online” it redirects you to an application form page.
  • You need to fill in the application form and upload the scanned images of photograph and signature in a per-defined format and the required documents in the designated slots.
  • Upload or submit the documents required.
  • Your account will start functioning within two-four working days.

How To Open A Savings Bank Account (Online)

To open a Savings Bank Account online you need to follow the following steps

  • Research the banks with their interests offered. Compare their rates with your specific requirements and what benefits are they offering that will be best for you. If you have made a choice then open the bank website you wish to open your account.
  • Now log in to the official website of the bank which you have chosen to open an account. Many banks does not have the online applying facilities.
  • Fill out the online application form for the savings accounts that meet your needs and submit along with the identity documents and proofs, photographs, address copy, Aadhaar card, employment proof etc. Some banks may tell you to submit the physical documents which they will send it to the executive,
  • The details will be then verified by the bank’s back-end team and you can start using your account instantly.

How To Open A Savings Bank Account (Offline)

The process for opening a Savings Bank Account offline are

  • Research the banks with their interests offered. Compare their rates with your specific requirements and what benefits are they offering that will be best for you. If you have made a choice then open the bank website you wish to open your account.
  • Carry a copy of your identity proof like Aadhaar, PAN etc.. two photographs, address proof, income or employment proof (optional), age proof.
  • Go to the nearest bank branch where you want to open the account. The office clerk will hand over an application form which is basically an account opening form.
  • Fill in the given form with the required details and submit along with the copies of the documents to the clerk.
  • The clerk will submit the application for the processing. Your bank account will start functioning within 1-12 working days.

Eligibility Criteria For Opening A Savings Bank Account

In order to open a savings bank account in a Major Bank, one must satisfy the following criteria. The Eligibility Criteria required for opening a Savings Bank Account are

  • The Savings Bank Account can be opened by the Indian Residents, Non-Indian Residents (NRIs) and Foreign Nationals.
  • The banks will allow those whose age is 18+. The savings account can be opened for minors by their parents.
  • There are basically no restriction if one opens a savings account.

Documents Required For Opening A Bank Account

Before going to open a Savings Bank Account in a bank you need to gather up all the documents before heading up in a Bank

  • Proof of age and identity: Any recognized document that is issued by an authorized community or organization that defines your identity is called as identity proof. An individual who wishes to open an account must have either an Aadhaar Card, Driving License, PAN Card, Voter ID etc.
  • Photograph: An individual must carry at least 2 recent passport size photograph of his/her along with the application.
  • Proof of Address: Any authentic, registered document by an authorized organization which contains the address of the applicant. Example- Driving License, Aadhaar card, PAN card, Voter ID, Passport, Utility Bill etc.
  • Senior Citizen Card: For opening a Senior Citizen Account one must submit their age proof along with the application form.
  • Proof of Income: The applicant must submit their proof of income or employment.

Saving money is a very useful and important habit. Everyone must implement it for a better future and lifestyle. This habit must be encouraged among everyone. The Government has opened many saving schemes for the children, middle aged citizens, senior citizens as well as for the poor people like the labors, workers living in the country. Every citizen of the country must avail and take advantage of this provision.

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