Opening a savings bank account is the first step through which you enter the banking industry. It is just like the first time you put a penny in your piggy bank. But, what is the difference between keeping money in a bank account and at home? When you decide to open a bank account, you have few things very clear. First, you want to keep your money safe with the flexibility to use it anytime you want. Second, you obviously have the privilege to earn interest on your balance amount.
Savings account interest rate is subject to change from one bank to another just like the minimum balance required to maintain that account. Most of the people are satisfied with earning a minimal interest on their balance do not care much about which bank is offering a good rate of interest. But, you must know that when you opt for a bank that is a low saving account interest rate lose the chance to earn more on their balance amount. Below is an example for your better understanding.
How does Savings Account Interest Rate Matter?
Suppose, you maintain a balance of ₹1,00,000 in your savings bank account but your bank is giving the rate of 4% per annum (interest calculated on monthly basis), you are only earning the interest of ₹4,074.15 which makes it to ₹104,074.15. If you get a higher rate let’s suppose of 7% in a bank, you would make a total of ₹1,07,229.01 which is a smart choice. So, to make the most out of your money, you can keep your money in a bank account giving you the highest rate of interest with the security of your money. So, having a savings account at a bank where the rate is higher is anytime a better choice.
What are the features of Savings Account?
Below are the features of savings account banks in India offer:
- Interest of up to 7% per annum
- Cash withdrawal facility
- Fund transfer via NEFT/RTGS/IMPS
- Net Banking
- Free Debit Card facility
- Chequebook facility
- Stop-check payment
- Insurance cover facility
- Locker facility
- ECS facility for loans
- Personalized Debit Card
What are the different types of Savings Account?
Just like the minimum account balance and interest rate varies from one bank to another, types of savings account is also different depending on the bank. Below are the types of accounts that you get on banks:
- Regular Savings Account
- Salary based Savings Account
- Savings Account for Senior Citizens
- Savings Account with exclusive benefits to women
- Savings Account for minors
- Zero balance Saving Account
Who are eligible for a bank account?
A person above the age of 18 years is eligible to open a regular savings account. For a current account, the person has to match the set criteria. In general, if you are 18 years old or above and have Aadhaar and PAN number, you are eligible to open a bank account.
What documents are required to open a bank account?
You only need to have Aadhaar number and PAN card number to open a savings account. For a current account, you need to have all the documents of your business and income proof.
With all the above information, we hope that you have understood the role of savings account interest rate in multiplying your money. Thus, if you feel it’s important, you can switch your bank account.