Bank Accounts are a powerful tool. It lets you save money and earn interest in the long run. It also comes with a host of advantages. Typically, they are the first account you open in your banking journey and the most basic one with any bank.
Today, you can easily consider a Bank Account with your chosen bank. The process is quick and convenient, and you can open them anytime and anywhere. Additionally, when you open a Bank Account with a reputed bank, you can maximise your benefits in the following ways:
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Keeps funds secure
When you open a Bank Account, you credit the money safely. This prevents you from losing your hard-earned money because of a secure place to store it. It also keeps your money from getting stolen. Additionally, the DICGC insures up to Rs. 5 lakh in your Bank Account.
Withdraw anytime
A Savings Account also functions as an emergency fund for emergency expenses. It allows you to save money and withdraw them whenever needed.
Provides credit access
Opening Bank Accounts and maintaining a steady balance makes you eligible for Loans and Credit Cards. So, if you want to apply for any, open a Savings Account.
Builds savings
Opening a Bank Account allows you to earn Savings Account interest rates on your balance. This lets you grow your money in the long run. Besides this, the interest you earn is up to Rs. 10,000 exempted from taxes.
Safe to receive money
Bank Accounts allow you to receive funds from third parties safely.
Conduct numerous transactions
Bank Accounts usually come with a Debit Card with which you can carry out transactions online and offline. You can also use Online Banking platforms to transfer money and carry out transactions.
Make investments
You can use your account to open a Term Deposit, invest in Mutual Funds, etc.
Enjoy other perks
Bank Accounts lets you enjoy exclusive offers, vouchers, memberships, etc.
How to open an account online?
To open an online Bank Account, follow these simple steps:
- Visit your bank’s website or download their Banking app
- Fill out your application and upload the necessary documents
- Consider a video KYC for smoother account opening
After completing the necessary formalities, your bank verifies the KYC details. Then, your bank opens the account, and you receive your account details at your registered email address. You can then use these credentials to access your account to deposit funds and conduct transactions until you receive your account starter kit.
Types of Bank Accounts
Banks offer various account types designed for different needs. The common options are:
Savings Account
This is the most popular account meant to accumulate savings and earn interest. There are no restrictions on the number or amount of transactions. Key features include:
- Modest interest rate of 3-4%
- No minimum balance requirements with some banks
- ATM/Debit card provided for withdrawals
- Lower average monthly balance requirement compared to current accounts
- Ideal for salaried individuals and common banking needs
Current/Checking Account
Meant for frequent transactions, this account has no limits on number of deposits or withdrawals. Current accounts do not earn any interest. Primary features are:
- No minimum balance is required, but a higher average balance needed
- Unlimited transactions with no restrictions
- Higher number of free cheque leaves per month
- Overdraft facility available based on eligibility
- Used widely by businesses and frequent transactors
Salary Account
Essentially, it is a regular savings account but comes bundled with benefits tailored specifically for salaried payroll customers. Typical benefits are:
- Account maintenance charges waived
- Free chequebook facility
- Discount on personal or home loans
- Higher interest rate on savings account balance
- Lower minimum average balance threshold
Fixed/Term Deposit Account
A deposit account that offers guaranteed higher returns by locking money for a fixed tenure. Features are:
- Interest rate is 6-7%, higher than savings accounts
- Tenure ranges from 7 days to 10 years
- Premature withdrawals reduce earnings
- Useful for fixed income investors like retirees
Zero Balance Account
As the name suggests, there is no minimum balance requirement. Meant for lower income groups or students. Key aspects are:
- No penalty for not maintaining any balance
- Limited transactions allowed per month
- Cannot issue cheques on these accounts
- Only basic banking features offered
Based on your financial situation and needs, you can choose the appropriate account type. Most banks also allow multiple accounts for each customer.
Maximizing Account Benefits
Follow these tips to optimize your bank account usage:
Maintain Good Balance
Try to maintain the prescribed minimum average monthly balance. This avoids penalty charges that banks levy if balances drop below the threshold. Having a good account balance also builds your credibility.
Set Up Recurring Deposits
Consider scheduling standing instructions to transfer a fixed amount automatically every month from your account into Recurring Deposits. This instills discipline to save regularly.
Review Account Statements
Sign up on your bank’s portal to receive digital account statements periodically via email or net banking dashboard. Review transactions to track spends and detect discrepancies if any.
Enable Security Features
Activate SMS and email alerts for transactions, along with OTP-based approval for enhanced security. Update your contact details to receive these communications.
Claim Tax Rebates
The interest earned on your savings account up to ₹10,000 annually is tax-exempt under Section 80TTA. Claim this deduction when filing returns to reduce tax outgo.
Check Add-On Features
Facilities like debit/ATM cards for cash withdrawals, paper/e-cheques, net banking, etc., come bundled usually. Check eligibility for complimentary locker facility, personalized cheque books, etc., as per your account type.
Go Digital
Opt for convenience of mobile and internet banking to check balances, view statements, transfer funds 24×7, pay bills, recharge, book fixed deposits, and more without visiting the branch.
As you can see, being prudent and maximizing the utilities offered with your bank account go a long way toward enjoying a rewarding banking experience over the long term.
