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Savings Account is the oldest and most common form of savings. The reason behind people preferring a savings account over any other form of savings is that here the principal amount is always safe no matter how much interest is earned. It can thus be said that the convenience of keeping the money in a savings bank account and earning interest is also the simplest form of investment.
What is a Savings Account?
A savings account is like a special bank account where you can keep your money safe and earn extra money on top of it, called interest. It's a really good way to save up for things you want, like a holiday, money for unexpected situations, or even to buy a house someday. Most savings accounts don't need you to have a lot of money to start, and some banks give you more interest if you keep more money in your account. Sometimes, though, there are rules about how many times you can take money out each month, so it's important to check the rules before you open an account.
How Savings Accounts Works?
Savings accounts are a fundamental tool for managing your money and building financial stability. Here's how they typically work:
- Deposit and Withdrawal: You can deposit money into your savings account by visiting a bank branch, using an ATM, or transferring funds electronically. Likewise, you can withdraw money from your account as needed, either through ATM withdrawals, in-person transactions at a bank branch, or electronic transfers. Example: Let's say you deposit Rs. 10,000 into your savings account. Over time, you continue to add money to your account, bringing the balance to Rs. 50,000.
- Interest Accumulation: One of the key benefits of a savings account is that it allows you to earn interest on the money you deposit. Banks calculate interest based on your account balance and the interest rate offered by the bank. The interest is typically credited to your account on a monthly or quarterly basis. Let's say you have a savings account with a closing balance of Rs. 50,000, an annual interest rate of 4%, and you want to calculate the interest earned over 30 days. Using the formula: Closing balance x Rate of interest x (No. of days / 365). Interest = 50,000 × 4% × (30 / 365). Now, let's calculate:
Interest = 50,000 × 0.04 × (30 / 365)
Interest = 164.38 Rs.
So, the interest earned on your savings account over 30 days would be approximately Rs. 164.38.
- Minimum Balance Requirement: Some savings accounts may have a minimum balance requirement, which means you need to maintain a certain amount of money in your account at all times to avoid fees or penalties. The minimum balance requirement varies depending on the bank and the type of savings account. Example: If your savings account has a minimum balance requirement of Rs. 5,000 and your balance falls below this amount, the bank may charge you a penalty fee.
- Transaction Limits: Some savings accounts may have limits on the number of transactions you can make in a month, particularly for electronic transfers or ATM withdrawals. Exceeding these limits may incur additional charges or fees. Example: If your savings account allows only five free ATM withdrawals per month and you make six withdrawals, the bank may charge you a fee for the extra transaction.
- Online and Mobile Banking: Many banks offer online and mobile banking services that allow you to manage your savings account conveniently from your computer or smartphone. You can check your account balance, transfer money, pay bills, and track your transactions anytime, anywhere. Example: Using your bank's mobile app, you can transfer Rs. 20,000 from your savings account to your friend's account to split the cost of a vacation.
Understanding how savings accounts work can help you make informed decisions about managing your finances and achieving your financial goals. By regularly depositing money into your savings account and taking advantage of interest earnings, you can gradually grow your savings over time.
Savings Account: Features & Benefits
Even though there are so many options to save money, the charm of Savings Account is still noticeable. Zero balance savings account has also got so much attention for its advantage of having the privileges of a savings account without maintaining any minimum balance in it. The features and benefits of Savings Account are as follows
- Safe and secure way to save money
- You can earn interest up to 8% per annum
- There is no minimum balance requirement for zero balance accounts
- Any Indian resident with valid ID proof can open this account
- There are no restrictions on how many bank accounts you can have
- You get ATM withdrawal option and Netbanking
- You can open a joint account with your family member
- Debit card issued can be used for payments
What is the minimum balance for a Savings Account?
The minimum balance required to maintain a savings bank account is subject to change from one bank to another just like the rate of interest. There are mainly two types of savings account - regular savings account and zero balance savings account. Banks have a certain minimum balance limit which an account holder has to maintain else he/she has to pay the penalty.
However, with the changes in other banking products, a savings account has also seen a major shift from being minimum balance account to zero balance savings account . Many banks now offer zero balance savings account due to increased demand as compared to the age-old pattern of keeping thousands in the bank account to avoid penalties. The savings account interest rate on these accounts are also high which makes it even more appealing.
List of All Banks Savings Account Interest Rates and Minimum Balance
List of Banks | Minimum Balance Required(INR) | Interest Rates (p.a.) | Features |
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Allahabad Bank Saving Accounts | 1000 | 2.75% - 2.90% |
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Andhra Bank Saving Accounts | 0/5//100/1000 | 2.75% - 4.00% |
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Axis Bank Saving Accounts | 0/10000/25000/100000 | 3.00% - 3.50% |
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Bank of Baroda Saving Accounts | 0/5/1000 | 2.75% - 4.50% |
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Bank of India Saving Accounts | 500/5000/10000/20000/100000 | 2.75% - 2.90% |
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Bandhan Bank Saving Accounts | 0/2000/5000/25000/100000 | 3.00% - 8.05% |
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Bank of Maharashtra Saving Accounts | 1000 | 2.75% |
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Canara Bank Saving Accounts | 500/1000 | 2.90% - 4.00% |
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Central Bank of India Saving Accounts | 50 | 2.80% - 3.25% |
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Corporation Bank Saving Accounts | 0/250/500/2500/15000/100000 | 2.75% - 4.00% |
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Dena Bank Saving Accounts | 0 | 2.75% - 4.50% |
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Dhanlaxmi Bank Saving Accounts | 0/5/1000/5000/10000/25000 | 3.00% - 4.00% |
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Digibank Saving Accounts | 0 | 3.00% - 7.00% |
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Federal Bank Saving Accounts | 0 | 3.05% - 7.15% |
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HDFC Bank Saving Accounts | 2500/5000/10000/25000 | 3.00% - 3.50% |
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ICICI Bank Saving Accounts | 0/1000/2000/2500/5000/10000 | 3.00% - 3.50% |
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IDBI Bank Saving Accounts | 500/2500/5000 | 3.00% - 3.50% |
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IDFC Bank Saving Accounts | 25000 | 3.00% - 7.00% |
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Indian Bank Saving Accounts | 250/500/1000 | 2.75% - 2.90% |
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Indian Overseas Bank Saving Accounts | 500-1000 | 2.75% - 2.90% |
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IndusInd Bank Saving Accounts | 0/10000/25000/2500000 | 3.50% - 6.75% |
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Jammu & Kashmir Bank Saving Accounts | 0/500/1000 | 2.90% |
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Karnataka Bank Saving Accounts | 0/500/1000/2000 | 2.75% - 4.50% |
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Kotak Mahindra Bank Saving Accounts | 0/2000/3000/5000/10000/20000 | Upto 4.00% |
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Lakshmi Vilas Bank Saving Accounts | 1000/3000/5000 | 3.00% - 7.00% |
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Oriental Bank of Commerce Saving Accounts | 0/500/1000 | 2.70% - 3.00% |
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Punjab National Bank Saving Accounts | 500/1000/2000/50000 | 2.70% - 3.00% |
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Punjab and Sind Bank Saving Accounts | 500/1000 | 2.70% - 5.00% |
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South Indian Bank Saving Accounts | 0/2500/5000 | 2.50% - 6.00% |
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State Bank of India Saving Accounts | 0/1000/2000/25000 | 2.70% - 3.00% |
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Syndicate Bank Saving Accounts | 0/100/500/1000 | 2.90% - 4.00% |
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UCO Bank Saving Accounts | 0/100/250/500/1000/1500 | 2.60% - 2.75% |
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Union Bank of India Saving Accounts | 0/20/100/250/500/1000 | 2.75% - 4.00% |
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United Bank of India Saving Accounts | 0/50/100/500 | 2.70% - 3.00% |
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Vijaya Bank Saving Accounts | 500/1000/2000 | 2.75% - 4.50% |
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YES Bank | 0 | Upto 7.00% |
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How to Open a new Savings Account Online
The procedure for online savings account opening with zero balance is very simple through Wishfin. The portal allows paperless process with no upfront verification. There is instant approval facility available which makes the zero balance savings account opening process the easiest thing ever. The details required to apply for online savings account are as follows:
- Full name
- Mobile number
- Email ID
- City
Once the above details are provided, the applicants can compare different banks offering a zero balance savings account with zero balance and then apply for the bank as per the choice. The complete process just takes a few minutes.
Savings Account Interest Calculator
Savings Account interest calculator can be used to calculate the estimated investment growth over time. It helps you set a goal and then save money accordingly. The calculation can be done by mentioning the annual interest, invested amount and time period. For a shorter time period, you need to invest more money and vice versa.
Difference between Savings and Current Account
Savings account and current account have some similarities as well as some differences. A current account, on one hand, is one of the important things to have for businessmen as it allows a higher number of transactions on a regular basis as compared to the savings account. There is no interest provided by a current account by most of the banks but the overdraft facility can be availed easily. The minimum account balance (MAB) required on a current account is also very high as compared to the savings account. For better understanding, have a look at some of the basic difference between savings and current account.
Features | Savings Account | Current Account |
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Type of Account | Deposit Account | Daily Transactions |
Minimum Balance Amount (MAB) | 0 | Minimum ₹10,000 |
Interest Rate | Up to 7% | NIL |
Free Transactions Allowed | Limited | Unlimited |
Overdraft Facility | No | Yes |
Thus, savings account, especially online savings account, is suitable for anyone who wants to earn interest on their deposits. Current account, on the other hand, is preferred by the individuals and firms who require monetary transactions on a day-to-day basis. Also, the highest savings account interest rate can be earned on a zero balance savings account and not on a regular bank account.
Open Zero Balance Savings Account Online at Wishfin
For an online bank account opening with zero balance at Wishfin, the only details required are your full name, mobile number, email address and your residing city. The Wishfin portal allows instant and paperless process of zero balance account opening online which makes the complete process hassle-free. Once you provide the above information, you can compare the various zero balance savings account opening from different banks and choose the best zero balance account online.
Different Bank Saving Accounts with Higher Interest Rates
SBI Savings Account: SBI online account opening procedure is quite easy as it can be done both on the website or by using the SBI YONO application. SBI account opening online is done at 2.70% interest rates with no limit on maximum balance. To open SBI account online, you can visit the official website of the bank or download the SBI YONO application. The SBI new account opening online comes with benefits like safe deposit lockers, nomination facility, auto-sweep facility with SMS alerts and many more.
HDFC Bank Savings Account: HDFC zero balance account opening online can be done at 3%-3.5% interest rate. The HDFC minimum balance for savings account can be Rs 2500, Rs 5000, Rs 10,000 or Rs 25,000. The HDFC bank zero balance account comes with customized banking service and no annual maintenance charges for the first year. HDFC online account opening is an easy process and comes with safe deposit lockers.
Axis Bank Savings Account: Axis bank zero balance account can be opened instantly. Axis Bank account opening is easy and you can get your account number instantly. The Axis bank savings account minimum balance can be axis zero balance account, Rs 10000, Rs 25000 or Rs 1,00,000. The axis bank savings account comes with an interest rate of 3.00% to 3.50%. The Axis bank online account comes with an auto FD feature for balances above Rs 10,000.
ICICI Bank Savings Account: The ICICI zero balance account will get you added benefits of ICICI EPF account. The ICICI zero balance account opening online can be done instantly and you can choose your own account number. The ICICI bank zero balance account comes with mobile banking and contactless mobile payments. The ICICI bank account online comes with an interest rate of 3% to 3.5%.
Bank of Baroda Savings Account: The Bank of Baroda online account comes with the benefit of zero balance account. The Bank of Baroda online account opening minimum balance can be Rs 500 or Rs 1000. The Bank of Baroda zero balance account comes with an interest rate of 2.75% to 4.50%. The Bank of Baroda account opening comes with the benefits of unlimited chequebook facility and free debit card.
Kotak Mahindra Bank Savings Account: The Kotak Mahindra Bank account opening has a digital bank account. The Kotak Mahindra Bank online account opening can be done 24/7 through Kotak 811 plan. The Kotak Mahindra Bank zero balance account opening online can be done instantly with the help of your Aadhaar card, at the interest rates of up to 4%.
Union Bank Savings Account: The Union Bank of India account opening can be done at the interest rates of 2.75%. The Union bank of India savings account comes with added benefits of free accidental insurance, banking facilities, reward points on debit card spend, free ATM and many more.
Types of Savings Account
In India, there are several types of savings accounts tailored to meet different needs and preferences. Here's a detailed overview of some common types:
1. Regular Savings Account
- This is the most basic type of savings account offered by banks in India.
- It allows customers to deposit and withdraw money as needed.
- Regular savings accounts typically offer lower interest rates compared to other types of savings accounts.
2. Salary Savings Account
- Salary savings accounts are specifically designed for salaried individuals.
- Employers often use these accounts to directly deposit employees' salaries.
- They may come with additional benefits such as zero balance requirements, higher transaction limits, and special offers on loans and credit cards.
3. Senior Citizens Savings Account
- Senior citizens, typically aged 60 years or above, are eligible for this type of savings account.
- Banks may offer higher interest rates and additional benefits such as priority service and discounts on certain banking products.
- Some banks may also provide facilities like doorstep banking and health insurance coverage.
4. Women Savings Account
- Women's savings accounts are designed to cater to the banking needs of women.
- They may offer benefits such as higher interest rates, cashback rewards on transactions, and discounts on shopping and lifestyle products.
- Some banks provide features like free insurance coverage and financial planning services tailored for women.
5. Digital Savings Account
- With the rise of digital banking, many banks offer digital savings accounts that can be opened and managed entirely online or through mobile apps.
- These accounts typically offer convenience, with features like instant account opening, paperless transactions, and 24/7 access to banking services.
- Digital savings accounts may also come with higher interest rates and lower fees compared to traditional accounts.
6. Joint Savings Account
- A joint savings account can be opened by two or more individuals, such as spouses, family members, or business partners.
- It allows multiple account holders to deposit and withdraw money jointly.
- Joint savings accounts are useful for managing shared finances and achieving common financial goals.
7. Specialized Savings Account
- Some banks offer specialized savings accounts tailored for specific purposes, such as education, healthcare, or retirement savings.
- These accounts may come with features like tax benefits, higher interest rates, and investment options suited for the particular savings goal.
- Before choosing a savings account, it's important to compare the features, benefits, and charges associated with different types of accounts offered by various banks. Additionally, consider your financial goals, transaction preferences, and eligibility criteria to select the account that best suits your needs.
Frequently Asked Questions (FAQs)
Below are some of the queries frequently asked about a savings account.
You can check your Savings Account balance through ATM, NetBanking, SMS and Passbook.