One of the most common bank accounts for people is a savings account because it can be used for a variety of things other than just investing. A person or an entity may open and use a savings account for a variety of purposes. Moreover, it is the majority of people’s first experience with the financial system.
You can become confused by all the options available if you’re intending to open your first savings account or if you currently have one but want to open a new one. Finding the ideal form of savings account for you will be possible, though, if you are aware of the factors to take into account while starting one. Before opening a savings account, you should take into account the following factors, which will help you discover the best savings account for you:
Interest Rate
We all know that compared to other investing options, savings accounts offer the lowest interest rates. They normally provide interest rates ranging from 3.5% to 4% each year. On savings accounts, several banks provide interest rates of up to 7% annually. However, banks typically require bigger balances, longer tenures, or both in order to offer higher interest rates on savings accounts. In order to prevent any misunderstandings, it is advised to obtain all the information from the bank authorities in advance and to carefully study the product booklet.
Minimum Balance Requirements
The minimum average balance requirement is equal to the average of all of your closing balances for the month. For Savings Accounts, different banks have varying minimum balance requirements. The minimum average balance requirement for the majority of public sector banks ranges from zero to two thousand rupees, whereas it ranges from five thousand to ten thousand rupees in top private banks, depending on the locality and bank policy. Depending on the type of savings bank account you select, this need may also change. If you choose the more expensive Savings Account option, you might need to keep a higher amount in the account. These premium accounts provide extra services including a relationship manager, doorstep banking options, access to premium debit and credit cards, discounts on locker costs, etc.
Network of Branches
Although most of us do various transactions through debit or credit cards, internet banking, mobile banking, Unified Payments Interface (UPI), etc., some banking operations cannot be done online, and you may be required to visit the bank branch. Hence, you should check if the bank has a wide network of branches and if the nearest branch is at a convenient distance.
Credit Facility
It is easier to avail of loans from the bank you hold your primary Savings Account with. While providing the credit facility, the banks consider your banking history with them. If you have a long and satisfactory banking relationship, it is a plus point for you when availing of a loan. Moreover, many banks have started providing pre-approved and pre-qualified loans to their customers with good balances and credit histories. These loans can be availed online instantly and with minimum to no documentation. Therefore, if you think you will have some credit requirements in the future, you should consider the credit facilities offered by the bank.
Discounts and Offers
If you prefer to make your shopping and bill payments cashless, you should not overlook the discounts and offers available on debit cards, credit cards, wallets, and other online transactions offered by the bank. Most leading banks offer lucrative discounts and offer from time to time, especially during festive seasons. These offers can save a substantial amount of money or earn you reward points if used wisely. To get the most of such offers, you should consider holding a Savings Account with a bank that has a tie-up with your preferred merchant or offers maximum overall discounts in your favourite category of products.
Fees and Charges
Although the banks pay you interest for investing your funds with them, they also charge you for some of their services. Banks generally charge with the service charges for using a non-network ATM more than the prescribed number of times, transaction SMS alerts, cash withdrawal, and deposit fee, opting for more cheques than the free limit, etc. After opening an account, the banks provide the Schedule of Charges with the Welcome Kit. You should also check for the annual fee of debit cards, credit cards, locker, etc., to avoid any disputes in the future.
Other Banking Products
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We open a Savings Account with a bank to slowly open the doors to other banking products, such as fixed deposits, recurring deposits, loans, insurance, lockers, mutual funds, etc. Therefore, apart from paying attention to the features and benefits of a Savings Account, you should also consider other banking products offered by the bank.
Customer Service
We keep our hard-earned money with the bank only on the basis of trust. If you have any trouble or need assistance with any banking issues, the branch staff and Customer Care should be prompt and helpful. It is of no use if the bank has an excellent line of products with poor customer service.
