For most individuals, savings accounts mark the first association with any bank. Till a few years back, you could open a savings account at a bank only if your application was endorsed by a current customer. Today’s banks are more open to welcome customers and assist them in opening a savings account with minimal documentation. This is because competition within the banking industry has soared today. As a result, it is a big boon for the banking customers to avail opportunities of financial handling and savings.
Savings Account can prove to be a great tool in not only keeping your money safe, but also handling it in an efficient way. Furthermore, today’s banks offer you with a range of additional facilities such as the sweep facility to of automatically move your money into a Fixed Deposit account upon reaching a certain limit. The customer needs to set a standing instruction with the bank for providing the sweep facility. Additionally, online banking gives you an array of facilities to manage your savings account much more efficiently than before. In India, the interest rate provided on savings accounts ranges from 4% to 7% and there may be minimum balance requirements that may vary based on account type and banking institution. The following are some of the additional benefits of owning a savings account:
Discounts and Cashback Benefits:
If you have a savings account, your bank may offer you discounts and cash-back benefits at partner locations whenever you use your debit card. Such benefits often include fuel surcharge waiver offers at partner petrol pumps as well and are often independent of the type of savings account you have with the bank.
Locker facility
If you book a locker with the bank where you already have a savings account, you may receive15 to 30% discount on the annual locker fees. However, it is noteworthy that not all banks offer this facility and in some cases the type of savings account you have will have a bearing on whether you qualify for this facility.
International debit cards
The bank in which you hold a savings account can offer you an international debit card that is valid outside of India too. This is usually free of cost. However do bear in mind that there are usually charges associated with using your debit card overseas. Such charges include but are not limited to foreign currency markup charges (2.5-3.5% of transaction value) as well as ATM usage charges.
Sweep facility
This is a very lucrative facility. Through sweep facility, a portion of your in savings account deposit can be transferred automatically to a fixed deposit that provides you with a higher rate of interest as compared to the standard interest rate applicable to a savings account. The sweep feature is activated as soon as the balance in your savings account exceeds a pre-determined level. . This facility is not automatically available with your savings account and you will have to complete a few formalities in order to get this facility activated on your account.
Automated Bill Payments
With the increased acceptance of internet-based payments among a large proportion of merchants across the country, you can easily set up your account to ensure that you never miss the due date of a bill. You can easily set standing instructions with your bank to set up a range of repeat transactions including but not limited to payment of bills related to credit cards, utilities (electricity, water, landline, mobile, internet, etc.), insurance premium payments and much more. Many banks have discount and cash back campaigns to promote this benefit.
Sending and Receiving Money
The advent of modern banking has made it much easier to transfer money both within the country as well as overseas. Using your savings account’s internet banking facility, you have the option of using the NEFT, RTGS, IMPS or international remittance facilities to send money almost anywhere. So say goodbye to the long queues at the bank cash counter and perform these transactions from the convenience of your home. On the flip side, you can easily check if you have received the money sent to you from the convenience of your home.
Conclusion
As mentioned earlier, many modern day savings bank accounts have minimum balance requirements and this is usually calculated on a average quarterly basis (AQB). As long as you meet your account’s AQB requirement, any and all the features associated with the account will be available to you. Failure to meet one or more of the pre-determined criteria can result in various penalty charges as well as the unavailability of one or more savings account features.