Ever since their inception, banks have served as organisations to guard people’s money. The banks offer several types of accounts that you could use depending on your financial requirements. Each of these different types of accounts has its own criteria and different rates of interest to offer. Moreover, every bank offers different types of services on their savings accounts. You need to consider the services and financial growth that the banks before opening a savings account.
What are savings accounts?
One of the different types of bank accounts offered by banks in India is a savings account. These types of accounts are specially designed to save money. If you are a salaried employee with short-term goals like a holiday, or vehicle purchase, and manage your finances, you can greatly benefit from savings accounts. Savings accounts are offered by almost all banks (both public and private) in India.
For most, savings accounts are the first exposure to a bank. These accounts come with the capacity of serving as an avenue to keep your extra cash safe. Simultaneously, these accounts also help you to gradually build an adequate corpus over the period. But you should consider a few factors to open a savings account with a bank as mentioned below.
Factors to consider while choosing a bank to open a savings account
- Rate of interest:
Usually, savings accounts offer lower interest rates in comparison to deposit accounts. People generally sign up for these accounts for their security features. But some institutions offer a higher rate of interest of up to 5-7%. For example, IDFC First Bank’s savings account is known for offering an interest of nearly 6.25% p.a. When choosing a bank for opening a savings account, verify the savings account interest rates.
- The average minimum balance criteria:
The minimum balance requirement can be defined as the balances you need to have in your account at the end of a month. It is important to remember that the minimum balance requirement varies from one bank to another. Usually, public sector banks have a minimum of INR 2,000. Some savings accounts come with zero balance accounts too. So, before signing up for a savings account, choose the balance requirement that aligns with your financial planning.
- The location of the bank:
Nowadays, a lot of people like to complete transactions through different means such as credit or debit cards, internet banking, mobile banking, or free banking apps. But you may still need to visit the bank for certain banking services. If such a situation arises, it would be prudent for you to choose a bank that’s located close to your home or office.
- Services Offered:
Unlike in the early 2000s, nowadays, you can manage your bank account online. As banking services are available online, you can access banking services anytime and anywhere. You just need to download the banking app on your smartphone. Moreover, top mobile banking apps also have the facility of auto-payments and regular statements to keep you updated. Choose a bank that offers comprehensive banking services through mobile and net banking for your convenience.
A savings account that meets the parameters above is the one you should sign up for. It is crucial to research and choose the most suitable bank if you are looking for long-term financial planning.
