Best Savings Accounts: What To Look For

There’s a proverb which says, “The art is not in making money, but in keeping it”. Nowadays, looking for a place where you can grow your money without any risk might be difficult but finding the best savings accounts for your money is not.These accounts are among the most preferred way to keep your extra money. A savings account is a deposit account held at a bank that provides principal security and a modest interest rate. These kinds of accounts are considered one of the most liquid investments apart from demand accounts (Demat accounts) or cash. These accounts give customers flexibility to keep a portion of their liquid assets aside for emergency or contingency. In this post, we will offer a few tips on which features you must know about before opting for and opening a savings account.

1. RATE OF INTEREST

This is a key feature to look into before opening any savings account as everyone get a little excited if they earn  better return from the interest on deposited money. The rate of interest varies from 4% to 6%, take a look at the table below.

Table 1: Interest Rates Offered on Savings Accounts of India’s Leading Banks

2. MINIMUM BALANCE

While many private sector banks, such as YES Bank and Kotak, require account holders to maintain a minimum monthly balance, usually Rs 10,000, there are several private banks that allow a minimum balance of Rs 500 also. However, most public banks do not have any such restrictions.

3. TRANSACTION CHARGES

It is very important to be aware of all charges and fees before choosing a savings account. At times, it happens we focus too much on the rate of interest and end up losing money due to other fees and charges. Most banks, except YES Bank, charge extra for more than 5 transactions on non-bank ATM usage. Kotak bank charges Rs 17.80 while IndusInd Bank deducts Rs 20 per transaction up to 5 withdrawals made via other banks’ ATMs in India. To issue a duplicate passbook and regenerate ATM pin Rs 100 and Rs 50 is charged, respectively.

4. SWEEP FACILITY

Under this facility, once the balance in your savings account crosses a certain threshold (as per your standing instructions), the bank will automatically move the excess amount to a liquid FD to help you earn higher interest on your money. Further, if at any time your account falls short of the minimum balance requirement of the bank, the deficit amount will be swept back into your account from the FD.

Let’s take a look at some salient features of savings accounts.

Also read: 6 Best Savings Accounts For Indian Citizens