Every individual’s primary bank account is a savings account that enables all the transactions of his/her day-to-day life.   

Most of us usually get a savings account in a bank that has been serving our family/parents or may be a bank that advertises in our college.   

But there is room for research in opening a savings account, you should look at the pros and cons of a bank and compare it with others before opening a savings account.  

Let’s look at the key factors to be considered before opening a savings account. 

Interest Rate 

Every bank offers a rate of interest i.e., a certain percentage of interest that your money earns because it is sitting with bank.  

You can compare the rate of interest banks offer and check out the best one. This way your money in the savings account can earn you better rate of interest. 

When it comes to investment avenues, savings accounts typically pay lowest interest rates as compared to other instruments such as recurring deposits or fixed deposits.  

Indian banks typically offer interest rates of about 4% on saving accounts, while some private banks offer higher interest rates to lure customers. 

Also Read: Digital Payment Methods – Making Life Easy

Minimum Balance 

Minimum balance criteria compel account holders to maintain certain amount of balance in the savings account at all times. This mandate varies from bank to bank. 

You should research about the minimum balance requirement and check if you are comfortable with the same.  

Some banks also offer zero minimum balance facility, this enables account holders to withdraw or use all the funds lying in the savings account without any strain of paying penalties.  

Deals & offers 

These days many banks offer exclusive deals on offers on debit cards, be it personalizing the card, waiving off annual feels, exclusive hotel memberships or OTT subscriptions - you can get range of deals. 

Also, you can check out the kind of card you receive, most banks have gold, platinum and so on. These have varied benefits – usually we don’t engage in such nuances, but it’s time to wake up! 

You should also check out yearly debit card fees of banks and compare the same – We say save money wherever you can! 

Also Read: 3 Important Lessons Money Has Taught Us

Facilities 

Now-a-days, everything is on our phones, even banking. None of us want the tedious traditional banking where we stand in queues for hours for printing the passbook. 

You should also look at the effectiveness of net-banking, bank apps of the bank you wish to open an account. This will ease your life and enable everything online. 

Other facilities such as customer care service available for you 24*7 can be a criterion in today’s wok world because most of us work at nights, early mornings and also, we transact round the clock. Therefore, if we are stuck bank should be able to help us out. 

Service Charge and other charges 

Banks usually levy service charges on a yearly basis for their services such as SMS alerts, ATM card, cheque book and so on.  

You should check out these services charges and understand if you really need a cheque book and if not, ask yourself why are you paying for the same. You can check with the bank if these service charges are flexible or fixed. 

This will also help you understand if the bank is transparent or they have any hidden costs too. 

Conclusion 

When it comes to opening savings account don’t treat it as a no-brainer. Not all banks are same. Just research your way into opening an account. 

Don’t worry we are here to guide you on every step. 

Also Read: The journey of GenZ to GenFin – Importance of Financial Literacy

FAQs 

1. Is savings account necessary? 

Savings account is a necessity in today’s world. It’s literally roti, kapda, makaan and savings account. With most Indians using UPI for their day-to-day transactions a savings account has gained a lot of importance. 

2. What is the difference between savings account and current account? 

A savings account can be opened by an individual, whereas current account is for corporations. Current accounts don’t earn interest on their accounts whereas savings accounts do. 

3. What if I have multiple savings accounts? 

Most people have multiple savings accounts and they use the benefits of respective banks be it low fees, high interest rates, great deals on debit cards and so on. 

Also Read: Let’s Decode Personal Finances for Gen Z: The 50-30-20 Rule