What is Bank Savings Account? Benefits and Features

Last updated on December 25th, 2024 at 03:57 pm

There are times when the Bank Accounts considered premium and only elite people can have one. But with the initiative of the Indian Government and the Financial Inclusion movement brought the Savings Bank Account to every individual possible.

But it is important to know the characteristics and Benefits of Bank Account so that you can utilize the account to its potential.

What is a Savings Account?

Savings Bank Account is a tool provided by banks to its customers for protecting their savings. Thus, the amount deposited in the savings account is protected by the bank and available for use at any time. Moreover, the bank provides interest on the amount deposited in the Savings Account.

The savings account some additional benefits, but the banks may charge you a nominal charge for each service provided. In other words, a Savings Account is a service provided by bank to protect your savings and makes it available to you at any time for a small charge.

The savings account can be opened by everyone by meeting simple conditions. Read further for understanding the basic features of the Savings Account.

Who can open a Savings Bank Account?

As said earlier, there was a time when the bank account opening was a cumbersome process and only some people could open the account. But now anyone can open a bank account that to with a simple process.

Moreover, the operation and benefits of account will vary for different age group as given below.

Age 18 Yrs and Older

• Opened Individually
• Operated Individually.
• All banking facilities are available like ATM, Cheque Book, Internet Banking, etc.
• Need to submit the KYC documents of Account Holder.

Age 10 to 18

• Opened Individually
• Operated Individually with limitations.
• All banking facilities are not available. But in exception it is provided
• KYC documents of the Account Holder and Parent/Guardian is necessary to open an account.

Age less than 10

• Account is opened in Joint Mode with the Parent/ Guardian.
• The Parent/ Guardian will operate the account on behalf of the child till the child attains the age of 10.
• Alternate banking channels are not provided.
• KYC document of the Child and Parent/ Guardian is required.

Saving Account Features Benefits for Different Age Group

Documents Required for Opening Savings Bank Account

To open a Savings Bank Account, one needs to submit Originals of any one of the SIX Officially Valid Documents (OVD) along with a RECENT PHOTOGRAPH for each individual related to the Bank account.

The Six Officially Valid Documents (OVD’s) are

1. Passport (Within validity)
2. Driving License (Within validity)
3. Voters Identity Card
4. Letter issued by the National Population Register containing details of name and address
5. Aadhar Card
6. MNREGA Card

Along with the OVD’s one should also need to submit PAN Card or Form60 to the bank for account opening.

Note that Additional information with supporting documents should be sumitted for NRI /PIO and foreign nationals.

Benefits of Savings Account

The Savings account is go to for the ordinary citizens who want to save their money. The bank saving account provides the same along with other benefits as given below.

Security: Banks provide security to your hard-earned savings from the Theft/ Burglary or even from the natural calamities.

Accessibility: The savings account can be opened with any bank and even digital bank accounts are possible nowadays thus it is easy to open and operated a Saving account without much effort.

Availability: The funds are available to the account holder, with the alternate delivery channels banks are creating more ways that you can utilize the saving with the bank.

Interest Earning: The important feature of saving account is that the banks provide Interest to the amount kept in the bank. Though it is not as much as other investment options, it is ideal for the people who do not want to take any risk.

Other Services: The banks along with the savings account provide additional services like access to banking channels like Mobile Banking, Internet Banking, QR Code, Payment Gateway, etc for a nominal fee

Cons of Savings Bank Account

• Saving Account provides interest to the customers, but it is very low compared to the other investment options in the market. Thus, it is not ideal for the people who want more return out of the investment.
• The interest earned in the saving account is added to your interest income and Taxable under The Income Tax Act 1961.
• The Banks levy charges for additional services provided. Thus, read the service charge page of a Bank’s website before opening account.
• The saving account has the Minimum Balance requirements. Failing to meet the Minimum Balance will result in heavy penalties.

Conclusion

The Savings Account is a perfect financial tool available for the public to preserve the hard-earned money safely without worrying. And it is accessible easily with mobile phone.

Thus, with the evolving banking sector, it becomes much easier to own and operated a saving account without much hassle. The charges on the services are nominal, and it is the best option for savings of your money.

For further queries, feel free to contact us, We will help you in becoming financial independent.