Types of Savings Account and their Differences

Savings accounts are a great way to save your money and earn interest on it at the same time. They are also convenient because you can easily access the money in them whenever you need it. However, it’s important to note that there are different types of savings accounts with varying features, benefits, and requirements. In this article, we’ll explore the differences between these types of accounts and help you choose the best one for your needs.

What are the Types of Savings Accounts?

There are 7 major types of savings accounts to choose from:

Regular Savings Account

A regular savings account is a financial account where individuals can deposit money and earn interest on their balance. This type of account allows for easy access to funds, with the ability to withdraw money at any time without any additional restrictions or requirements. It is a popular choice for many people as it is a simple and straightforward way to save and grow their money.

Features of Regular Account

• A savings account allows you to earn interest on the money you deposit
• You can easily access your money at any time and from any location
• Debit cards, internet banking, and mobile banking can be used to make transactions and transfer money
• There may be a minimum balance requirement to avoid penalties
• Account holders receive a passbook and a cheque book to help track and make payments
• Savings accounts are a secure way to save money.

Salary Savings Account

An account specifically created for salaried employees where their monthly salary is deposited by their employer is called a salary saving account.

Features of Salary Savings Account

• A salary savings account does not require a minimum balance to be maintained.
• As a holder of a salary account, you can receive a cheque book/passbook, monthly e-statements, a debit card, phone banking services, credit card offers, and access to net banking.
• A salary account can be used to pay bills for utilities such as electricity, water, and gas.
• The holder of a salary account may be eligible for various loan offers.
• A salary account can also be used to transfer funds to other accounts.

Zero Balance Savings Account

A zero balance savings account is a type of account that does not require the account holder to maintain a minimum balance. With this type of account, the account holder is able to withdraw money at any time, even if it leaves the account empty.

Features of Zero Balance Savings Account

• Zero balance accounts come with various services such as net banking, a cheque book/passbook, and a debit card.
• Account holders are not charged for the first few ATM transactions every month.
• These types of accounts are suitable for individuals who earn enough to cover their basic needs.
• Zero balance accounts promote saving habits.

Kids Savings Account

A child under the age of 18 can have a special savings account called a kid’s savings account. This account must be linked with a parent or guardian’s account to maintain a minimum balance.

Features of Kids Savings Account

• Encourages children to save money
• Provides benefits similar to a traditional savings account
• ATM/Debit card is also issued to the child, with daily withdrawal limits
• Any balance in the child’s account that falls below a certain threshold will be maintained by deducting the amount from the parent’s bank account
• After the age of 18, a child’s savings account becomes inactive and must be converted to a regular savings account
• Minimum account balance must be maintained to avoid penalty

Family Savings Account

A family savings account is a type of bank account where multiple members of a family can combine their individual savings accounts into a single account. Each member of the family has their own login and can manage their own savings within the account. The account can be opened by any family member, including spouses, children, siblings, in-laws, grandchildren, grandparents, or parents.

Features of Family Savings Account

• When you combine multiple savings accounts under a single ID (a family savings account), you must maintain a minimum balance on all of the accounts included in the combination. The minimum balance will be equal to the highest minimum balance requirement among the individual accounts.
• In case of an emergency, a family savings account allows you to transfer funds from another account to cover a payment. For example, if you wrote a check for an amount that exceeds the balance in your account, the bank will transfer funds from another linked account to cover the difference.
• The primary account holder (the person who opened the family savings account) will be charged a penalty if the minimum balance is not maintained.
• Even if one of the accounts included in the family savings account is a salary savings account (which typically does not have a minimum balance requirement), a minimum balance will still be required for the combined family savings account.
• If the primary account holder wants to leave the family savings account, the account can be dissolved with the consent of all other account holders.
• The number of savings accounts that can be linked to a single Family ID may vary depending on the bank.
• An individual account holder can leave the family group by notifying the bank.
• The privacy of each individual account holder is protected within a family savings account.
• The primary account holder can be chosen by the family members and will receive a Primary customer ID.

Senior Citizen Savings Account 

A senior citizen savings account is a financial product designed for individuals over the age of 60. These accounts often offer higher interest rates on deposits made by account holders and may also provide tax breaks for senior citizens.

Features of Senior Citizens Savings Accounts

• A senior citizen savings account can be opened by individuals who are over the age of 60.
• Individuals who are over the age of 55 and have retired early through superannuation or the Voluntary Retirement Scheme may also be eligible to open a senior citizen savings account.
• Retired military personnel may also be eligible to open a senior citizen savings account if they meet the requirements.
• Non-Resident Indians (NRIs) and Hindu Undivided Families (HUFs) are not eligible to open a senior citizen savings account.
• A senior citizen savings account can be opened as a joint account with a spouse.

Also Read: Paytm Senior Citizen Fixed Deposit Interest Rate