Modern Savings Account Choices and How to Choose Right


These days everything starting from bank fixed deposits to life insurance policies are custom designed to meet your specified financial needs and goals. So, why should saving bank accounts be left behind?!Here is a list of modern, tailor-made savings bank accounts created for the modern savers to meet their diverse needs. Various PSU Banks and private banks offer a variety of savings accounts depending on the clients’ needs of financial health. But which is the best choice for you? Read on to find out how you can choose right.

Simple/regular savings account:

These are the basic age old savings bank accounts that are offered to be opened if any individual wants  to open an account. One may open such an account on your own individual capacity or even jointly. With this type of account you get access to ATM facility and debit cards and may also choose to opt for additional facilities like phone banking and internet banking.

Most banks require the account holders with regular savings accounts to maintain a minimum or an average balance that is calculated on a quarterly basis. This could be any amount in between Rs. 2500 to Rs. 10,000 depending on the bank. The deposit amount in such a bank account is insured by the organization Deposit Insurance and Credit Guarantee Corporation (DICGC) for an amount up to INR 1 Lakh. Thus, this renders your capital relatively safe. Also the amount of interest one can expect to earn from such deposit accounts will differ from one bank to another, and can range from 4 percent to 6 percent.

No frills or zero balance savings bank account:

If you are not eligible to open a simple account due to limited capital abilities then you can opt for a no frills savings bank account or a zero balance bank account. People who belong to the economically weaker sections opened several such accounts under the Pradhan Mantri Jan Dhan YojanaPMJDY that offers zero balance facility.

In case of such accounts if the total balance determined by the bank (which is usually INR 50,000) or the overall transactions go beyond a certain amount i.e. INR 1 Lakh for that particular fiscal year then such an account is automatically converted into a regular savings account.

Sweep-in savings bank account:

These are a combination of savings bank accounts along with fixed deposit accounts. In these accounts any surplus fund beyond a certain pre-determined limit will be automatically fixed in multiples of a pre-fixed sum as a one year fixed deposit. These accounts come with an automatic reverse feature where if the money deposited in the account falls below a certain limit you can earn the rate of interest which was determined previously for that specific time period. For availing these specialised services of a sweeping bank account some amount of service tax is charged.

Salary account or salary savings account:

These days all organizations whether big or small operate by opening a salary account for their employees where they credit their monthly payments. Such accounts come with several types of benefits on concessions like multi-city cheque issuing feature, zero minimum balance and other relaxation features. Most such accounts only remain active as long as you have the same job under that employer and later get converted into a regular savings account when you switch your job.

So, it is understandable that savings bank accounts have come a long way since its premiere days of being a single account available for all with minimum flexibility and customization. Now it is available in a variety of options depending on your needs and the amount of capital you are willing to work with, in your savings bank account.

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