Home Articles Articles What is a savings bank account?What is a savings bank account?

What is a savings bank account?

IndianMoney.com Research Team | Updated On Friday, September 26,2014, 05:32 PM
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What is a savings bank account?

As the name denotes, this account is perfect for parking your temporary savings. These accounts are one of the most popular deposits for individual accounts. These accounts provide cheque facility and a lot of flexibility for deposits and withdrawal of funds from the account. Most of the banks have rules for the maximum number of withdrawals in a period and the maximum amount of withdrawal, but no bank enforces these. However, banks have every right to enforce such boundaries if it is felt that the account is being misused as a current account. At present the interest on these accounts is regulated by Reserve Bank of India. Presently Indian banks are offering 3.50% p.a. interest rate on such deposits.

This account gives the customer a nominal rate of interest and he can withdraw money as and when the need arises. The position of account is depicted in a small book known as 'Pass Book'. Such accounts should be treated as a temporary parking area because the rate of interest is much less than Fixed Deposits. As soon as one’s savings accumulate to an amount which he can spare for a certain period of time, shift this money to Fixed Deposit. The returns on the money kept in Savings Bank account will be less but the freedom to withdraw is the highest.

Tips to remember while going for a Savings account

  • Choose a relatively smaller branch of a Bank for your savings account.
  • To open an account, you will require a photograph and an introduction from an account holder.
  • Select a Bank which asks for the least amount of minimum deposit.
  • Ask for a cheque book.
  • Most Banks have restrictions on deposits. Understand the restrictions well at the time of opening the account.
  • Select a Bank which has minimum restrictions
  • Some Banks impose service charges on activities like issue of cheque book. Try to get a bank that offers least charges

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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