Savings Account
A Savings Account also called a Savings Bank Account or SB Account, is one of the most trustworthy and secure options to save your money and earn interest. It is a money deposit account you can maintain with a bank or post office. The interest rate on the money you save here is low, but it is safe, and you have the flexibility to add more money or withdraw at any time, subject to some conditions.
For building your savings for short term goals, a savings account can be the most preferred option. When there is a surplus amount available with you, depositing this amount can fetch a small profit at a modest interest rate. The interest earned from a savings account is taxable.
Benefits of Savings Accounts
Features of Savings Account
- People of all ages, including minors, can open a savings account. All you have to do is complete the verification process, submit the required documents and undergo a KYC verification. There are several additional features that banks provide to savings account holders. They include the facility to open a Demat account or take a locker for your use in the bank branch.
- You have to maintain the minimum account balance in your savings account as per your bank’s rules. There is a penalty for failure to do so, and this varies from bank to bank. You can receive money from others and make payments using a savings account. Receipts can be through cheques, demand drafts, Internet banking or IMPS and payments can be through all these modes as well as paying for online or offline purchases through debit cards. You can withdraw money from your own account by using cheques, withdrawal slips and Internet banking and also from ATMs using an ATM-cum-Debit Card.
- Many savings accounts in banks offer bundled personal accident insurance, and some entitle you to join group life and health insurance schemes which have many convenient benefits.
- The Reserve Bank of India determines the interest rate on savings accounts. The interest income is subject to TDS if it is more than Rs 10,000 per annum.
Why should you open a savings account?
Purpose
You can keep your money safe, accumulate it for short-term goals, make and receive payments as well as earn interest on your balance in a savings account.
Access
The account is easily accessible. Right from opening the account, depositing and withdrawing the account holder can complete the processes quickly. You can readily withdraw money during emergencies.
Easy withdrawal
There are several options available to withdraw money from a savings account, including ATM card, net banking, withdrawal slip and cheque.
Paying and Receiving funds
You can make payments to others using various payment instruments like cheques, Internet banking and IMPS.
Safety
The money in your savings account is 100% safe and secure
Savings
The primary concept behind the savings account is to save your money. Your savings secure your present and future.
Risk-free interest
The interest amount given by the bank is a major benefit of a savings account.
What are the types of savings accounts?
Savings Account Taxability
- The interest on savings accounts is taxable. Under Section 80TTA of the Income-tax Act, 1961, you can claim tax deductions on interest upto Rs.10,000 savings accounts across all banks as a deduction per year.
What are the limitations of savings accounts?
The account holder has to maintain the minimum balance specified or pay a penalty.
Even though the accessibility is very good, there are limits on cash withdrawals and deposits that vary by bank and depends on the balances you maintain in your account.
The interest rates are lower than the other type of accounts and investments.
Eligibility to open a Savings Account
- Citizen of India
- NRI
- Foreigner in India
- 18 years of age
Documents required to open a savings account
- PAN
- Voters ID
- Driving License
- Passport
- Age proof documents
How to open a savings account online?
- Log into “Fincover.com”
- Select the “Banking Products” tab
- Choose the “Savings Account” option
- Enter your personal details such as name, date of birth, city, contact number, email Id, and all other details asked
- The software will compute the details entered and list the best savings account options
- Pick the account and bank that suits you the most, and the bank will contact you regarding the account opening process