A savings account is the first step in the world of investment and savings. The account allows you to keep your surplus funds, and you neither have to worry about its safety nor you have to take a lot of effort to manage these accounts. Moreover, this account acts as the base on which you can build your financial portfolio. Depending on this account, you can make investments, take loans, and whatnot.
Further, you will get to access different types of savings accounts as per your requirements. Many factors impact the choice of savings accounts, and one of the major points is the savings account interest rate. Most banks offer 3% to 7% interest rate for savings account holders.
Almost all the banks in India allow you to open a savings account. However, to settle for the best option, it is essential to compare the different current savings account interest rates and related parameters like minimum balance requirement.
Factors to Consider Before Opening a Savings Account
- Interest Rate
Interest rate is one of the major factors that must be considered while you are opening a savings account. The interest rate determines how much you are going to earn on the savings and differs from one bank to another. The interest rate you will get also depends on the type of savings account you opt for.
Compared to other investment options, savings accounts usually extend lower interest rates. Maximum banks keep the interest below 4%. Before you get fascinated by the bank offering the highest interest rates savings account, thoroughly review the fine print.
- Minimum Deposits
Another important consideration is the minimum balance you must maintain in the account to avoid getting penalized. Also, check whether the savings account is a zero-balance account or if you have to keep a minimum balance as set by the financial institution. The minimum balance that you are asked to keep also depends on the banking services and features that you wish to avail.
It is wise to settle for a bank that does not require you to keep a substantial amount in the account as a minimum cash balance. To make an apprised decision, always reach out to the bank and understand their balance requirements.
- Debit Card Deals
In order to stand out from the rest of the competitors, most financial institutions extend lucrative offers and deals on their debit cards. Such deals encompass insurance coverage to cash-back offers. You can use the card to get discounts on restaurants, movie tickets, etc. Ensure to use the debit card wisely to reap the benefits of these deals and improve the utility of the savings account.
Some financial institutions charge a certain amount of annual fees on debit cards. Even this amount is waived by some financial institutions if your annual transaction surpasses a pre-set threshold. To ensure a healthy banking experience, compare the different deals and features available on the debit card.
- Transaction or Service Charges
With some banks, you have to pay for the ancillary services. Even for the issuance of duplicate ATM Cards and checkbooks, banks charge a fee. Further, there are ATM withdrawal fees, annual charges on debit cards, and more. Not knowing these charges beforehand can affect your financial management.
This is the reason why you should consider checking the additional charges before opening a savings account online. It will help you avoid any kind of monetary burden. Also, choose a bank that is transparent with the additional costs.
- Online Accessibility and Doorstep Facilities
You should gauge the ease of accessing the savings account as well. Check whether the bank is offering mobile and internet banking facilities or not. Assess whether it will allow you quick withdrawal during any monetary exigencies. Considering these factors is very important to find a savings account best suited for your needs.
To extend convenience to customers, banks have started extending doorstep facilities. This proves extremely useful in this world where people have tight schedules. Check whether the bank where you are going to open a savings account has doorstep facilities. Some of the notable doorstep services include demand draft delivery, cash/cheque pickup, documentation pickup, etc.
Besides knowing the factors that influence the efficacy of a savings account, it is equally important to know the entire savings account feature before opening one.
Types of Savings Accounts
Here are the different types of saving accounts:
- Regular Savings Account
Regular savings accounts are opened as per standard terms and circumstances. Here money is deposited for safekeeping. This also include a zero-balance account where you don’t have to maintain any specific minimum balance.
- Senior Citizen’s Savings Account
This is the same as the regular savings account. The only difference is that under this, senior citizens will be able to reap the benefits of high-interest savings accounts and other notable banking privileges.
- Salary-Based Savings Account
These accounts are opened upon any company’s request to transfer its employees’ salaries. These accounts usually do not have a minimum balance requirement. If the salary is not disbursed in this account for a few months, it will become a standard savings account.
A savings account is the most basic bank account that extends a high level of liquidity and ensures the fund’s safety. Savings account interest rate is one of the major parameters that you must consider while opening this account. You must also check a few additional features before opening a savings account, along with the availability of the bank branches. This way, you will be able to find a financial institution and a savings account that fits well with your requirements.