What is Savings Account?

Last Updated : Dec. 30, 2021, 12:52 p.m.

People spend their lives earning and saving money for their future. But it is difficult to keep your savings in cash at home. Therefore, you will need a savings account to put your money with the bank. You must know what is savings account in banking is and the various facilities you will get if you have a savings account. The main objective of a savings account is to save money in the bank. You can deposit cash in the bank and earn interest on that amount. Saving money in cash will not earn a single interest but you can earn interest if you deposit money in the savings account. You will get many banking services if you have a savings account.

Benefits of Savings Account

Individuals will get the following benefits if they have a savings account with the bank. You can explore all of them below:-

Debit Card

Every savings account holder gets a debit card as soon as he opens a savings account. You can use a debit card for making payments and withdrawing cash from ATMs. On the other hand, various websites have offers on debit cards and you can save some bucks through it. But a debit card is only issued if you have a savings account.

Credit Card

You will also get pre-approved credit cards from the bank if you have a good transaction history. Credit cards give you quick debts and a lot of offers on various brands. So, a credit card is one of the most opted facilities of a savings account.

Interest

Every savings account gives interest on the amount that an individual has kept with the bank. The bank might give quarterly, half-yearly, or yearly interest on the savings you have with the bank. The savings account interest rate might vary from bank to bank.

NEFTs and RTGS

You can also transfer money from your savings account to other bank accounts through RTGS and NEFT . The banks transfer money within 24 hours to another bank as soon as you make the RTGS or NEFT payment.

Cash Deposits

You can also deposit cash whenever you want to. Either you can visit the nearest branch or make use of the Kiosk machines to deposit cash in your savings account.

Zero Balance Savings Account

There are also some savings accounts where you don’t have to maintain a minimum balance. No penalties will be changed even if your savings account balance is zero. These types of savings accounts are known as zero balance savings accounts.

How to Open a Savings Account

You can submit an online application on the banking website of the respective bank to open a savings account. On the other hand, you can visit the bank and ask for the Savings Account Form. Then you will have to fill that form and submit it to the bank to open the savings account.

You will need the following documents while opening a savings account with any bank:-

• One Identity Proof
• One Address Proof
• Multiple Passport Size Photographs
• Cash (as asked by banks)
• Signatures

Conclusion

Now, you know what is savings account in banking and the process to open a savings account. There are a lot of benefits of having a savings account and you can see all of them above. The account initiates savings and the purpose of it is to deposit money and save them for the future.