Types Of Savings Account You Can Open In India

For many of us, our first Bank Account is our parents' open or the one we hold with them. The moment we start earning, we realise we need to secure our hard-earned funds in our Savings Account. This is when we visit the bank for opening an account and start our independent financial journey.

In India, you can do multiple online Savings Account opening as options to choose from. Let us understand them in detail.

Regular Accounts

This is the most common one where there are limits on the funds deposited. However, there are restrictions on withdrawals. You can do so only through cheque payment slips or ATMs. You are given a chequebook after opening the account and need to maintain an average monthly balance.

Joint Accounts

If the account gets operated by more than one person, it is a Joint Account. In India, such accounts are more of a family account where four people are named as account holders. If all the holders are adults, the banks offer a Debit Card to them. All adult account holders can jointly operate the account.

Salary Accounts

Most organisations provide such accounts to their employees when they join. Such an account is called Zero-Balance Account, and here, you need not maintain a monthly average balance. Generally, these account holders are provided with an instant welcome kit that includes a chequebook, passbook, Debit or ATM Card, and Online Banking access credentials.

Online Accounts

Also called an online account, this is ideal for those who want to manage their banking needs seamlessly. You also get high Savings Account interest rates instead of the Regular Account. You also need not pay any account maintenance fees and no requirement of minimum balance maintenance too.

Senior Citizen Accounts

Specially meant for the older people, particularly those over 60 years and above, they are offered higher interest rates, around 0.5%, on their savings. They are also given waivers maintaining a minimum balance and offered better interest rates on term deposits.

Women Accounts

Ladies over 18 years and above can open a Saving Bank Account that comes with maximum benefits. Opening such accounts mean higher interest rates. Women also receive discounts on other bank products and complimentary Insurance cover. They also get Debit Cards with high withdrawal and shopping limits.

Minor Accounts

A Joint Account, here the primary holder is the minor and operated by one of the parents or guardians until the minor turns 18 years. Once turned 18, the account automatically gets converted to a Regular or Joint Account.  

Pradhan Mantri Jan Dhan Yojana

For encouraging all Indians, especially the lower-income groups to open a Bank Account offline or on the Banking app, the Indian Government launched this unique Savings Account. There is no average monthly balance maintenance commitment. Account-holders get Rupay Debit Cards, and free Accident Insurance Cover worth Rs. 1 lakh and Insurance cover of Rs. 30,000.

Asset Allocation Strategies In Mutual Fund Investments

The Stock Market offers the maximum returns on your investments, but it is also volatile. This makes most investors nervous. However, if you plan your asset allocation strategy carefully, you get to leverage the volatility in your favour. For this, you must understand your risk appetite carefully. Your short and long-term investment goals also play an essential role in streamlining your Mutual Fund Investment Plan.

Combining assets pertains to creating a balance in your portfolio. This way, you avoid the risk concentration in one asset class. Spreading the returns across Bonds, Equities, Debt Funds, Money Market Instruments, etc., is the essence of the asset allocation strategy. It is a subset of the diversification process. Qualified fund managers get appointed to carry out the process for you. But it helps to understand the different strategies employed for tracking your investments.

Risk profile based

This method primarily gets based on your risk tolerance. Here, you use your risk appetite to determine the distribution of funds in different asset classes. To make it easier, you should identify which category you fit into based on your risk tolerance level. They include conservative, income-based, growth-oriented, balanced, and aggressive. Use this to decide the portfolio structure when you invest in Mutual Fund.

Age-based

This is not a widely used approach. Nonetheless, it is an effective strategy to understand where you stand in the investment journey. As the name suggests, the primary consideration is your age. You decide the percentage of Equity Funds in your portfolio based on your age. The logic behind it is the potential of your earnings depending on the years left until you retire.

Dynamic

As aware, the Stock Market is volatile. It keeps fluctuating depending on the market conditions and economic forces. This, in turn, affects the returns you earn on your investments. The best way to tackle the uncertainty is by adjusting your portfolio. That is precisely what the dynamic strategy aims to do. When a particular asset is expected to perform well, you increase the allocation to that asset and vice versa. Track this through Mutual Fund apps.

Strategic asset allocation

Your portfolio should follow a basic policy. This involves assigning a proportion to each asset class. You do this based on the expected returns. For instance, if you want higher returns, you opt for a higher Equity percentage and combine it with Debt instruments, Bonds, Real Estate, and other schemes in varying proportions. You may also include long-term funds like ELSS (Equity Linked Savings Scheme) for tax-saving.

Tactical

This strategy aims to benefit from the short-term opportunities in the Stock Market. The short-term plan predetermines the asset mix considering the market timing to give you short-term profits. You should opt for this if you plan your leverage by hedging the market.

Understanding The Difference Between NEFT and RTGS

With the increased technical knowledge and introduction of digital payment systems, online Fund Transfers have become the norm. Users have various modes to choose from. However, some time-tested mediums enjoy popularity for inter-bank transfers. They are National Electronic Funds Transfer and Real-Time Gross Settlement. The Reserve Bank of India (RBI) regulated systems enable you to transfer to Savings Account directly.

One thing to note is the speed you get with these traditional systems. They are apt for making quick payments and peer transfers across India. Both offer advantages but have different settlement concepts and are suitable for specific purposes. Understanding this disparity helps in making the proper selection for transferring funds. Consider these factors to understand the

Settlement process

The method of settling payments is the significant RTGS and NEFT difference. The funds get settled hourly in NEFT and get processed in batches on weekdays. The timing varies on Saturdays, and no transfers occur during Sundays and Bank holidays. This processing happens within two hours. RTGS takes place in a specific time slot prescribed by the Reserve Bank of India, but the processing is immediate.

Timing

Getting the timing right is crucial to access these services. As discussed, NEFT gets processed in batches. This happens between 8:00 AM to 6:30 PM on weekdays. The timing varies on Saturdays. RTGS, on the other hand, begins from 9:00 AM and lasts till 4:30 in the evening. These timings change based on the regulations and depending on the bank. Ensure to check the same before online Saving Account opening.

No transfer takes place in both the cases on Sundays and bank holidays. If these transactions fail, the refund procedure varies for NEFT vs RTGS.

Difference between NEFT and RTGS:

Transaction limit

It is crucial to stay mindful of the minimum permissible limit while making transfers to avoid charges. While there is no restriction in NEFT, you require a minimum of Rs. 2 lakh to make transfers using RTGS. This is because it is meant for high-value transactions. As for the upper cap, there is no limit on both payment methods. Hence, opt for RTGS for transferring a considerable amount, whereas NEFT is suitable for regular transfers.

Charges

When you use NEFT to make outward transactions that amount to Rs. 1 lakh, you pay Rs. 5 plus service tax. The fees go up to Rs. 25 plus service tax if the transaction amount exceeds Rs. 2 lakh. Outward transactions in RTGS attract charges of up to Rs. 30 per transaction if the amount is around Rs. 2 lakh to Rs. 5 lakh. You get the exact details when you use these services through banking apps.

How To Effortlessly Open A Savings Account Online?

 Are you looking for a perfect place to deposit your savings and earn a reasonable interest over a period? You might want to start by opening a Savings Account online to simplify your financial life further.

Online Savings Account opening might be the best thing for humankind since the technology was invented. Make use of your ideal money by quickly depositing it in an online Bank Account. Here is how: 

Opening account online 

• Firstly, ensure you are a Bank Account holder in the bank of your choice where you wish to open a Bank Account.
• Processing details instantly has gotten easier when you already have the list of documents handy with you. You find this list on the bank’s website. It is advisable to keep mandatory documents like Aadhaar, address proofs, and a PAN card with you.
• Now, visit the official website of the desired bank or download their banking app.
• Speed up the opening procedure with video-KYC on computers or smartphones with video and audio calling features.
• After your details get verified by the bank, your account is accessible immediately.
• Other starter kits for your Savings Bank Account get mailed by the bank post. 

Required list of documents 

Some of the documents that banks ask for online Bank Account are: 

• Account opening form that includes all the details asked and affixing your photograph on the same.
• Choosing from a range of documents that serve as ID proofs:
• PAN Card
• Aadhaar Card
• Passport
• Driving License
• Voter ID Card
• Employee ID Card
• Other photo IDs provided by central or state government
• Banks accept permanent or temporary Address proofs such as:
• Passport
• Aadhaar Card
• Ration Card
• Driving Licence
• Utility Bills like electricity, telephone, gas, or water
• Rental lease/agreement

Service charges or fees associated with the account 

Eligibility	Anybody above 18 years with KYC
Initial Minimum Deposit	Rs. 500
Minimum Account Balance	NIL
Maximum End of Day Balance	Rs. 1 lakh
Monthly Average Balance (MAB)	NIL
Annual Interest Rate	2.25% (Applicable from 1st of Feb 2022)
Interest Payment	Quarterly
SMS Alerts	Rs. 10 Quarterly
Account Statement	Free Monthly e-statement*
Balance certificate per Instance	Rs. 50
Card/ KIT returned due to wrong address	Rs. 50
Bill Payments/ Re-charge	Free
Cash deposit charges	Free
Cash withdrawal charges	Free
Virtual Debit Card Issuance	Rs. 25

A Definitive Guide To NRE Fixed Deposits

Regular investment is a healthy financial habit. But many Non-Resident Indians refrain from doing so. They are hesitant because they lack market knowledge. They might also be unaware of the stock market scene overseas. In such cases, they should opt for a non-resident Indian or NRI Fixed Deposit.

It serves as an excellent investment channel to global Indians. It allows them to deposit the income earned abroad safely. It also helps them expand their investment substantially. This way, they have backup financial aid at their disposal. Such types of FD Accounts come in three types. They are as follows:

• Non-Resident External (NRE) Fixed Deposit Account
• Non-Resident Ordinary (NRO) Fixed Deposit Account
• Foreign Currency Non-Resident (FCNR) Fixed Deposit Account

Of them, NRE Fixed Deposits are the most preferred type. This is because it is exempt from taxes. This way, it enables the NRI to retain their investment easily. The following aspects help you gain a better understanding:

Repatriation

An NRE FD Account offers complete repatriation. This means you can withdraw the principal amount and the interest earned.

Interest rates

Compared to other NRI FDs, this FD offers relatively high interest rates. This way, you get a better chance at building your investment.

Fund source

An NRE FD converts the deposited income earned overseas into Indian Rupee. It also maintains the funds in the same manner.

Processing time

You need not wait for a lengthy time to open your NRE Fixed Deposit Account. Nowadays, people prefer the online option. It is more convenient that way. However, you could visit the nearest branch and open it as well. Either way, you must submit the following documents:

• A valid Indian passport
• Permanent Account Number (PAN) Card or Form 60
• Proof of address (of both India and overseas) as per Customer Identification Policy
• Proof of NRI or Person of Indian Origin (PIO) status
• Recent passport size photographs

While these are the basics, your bank may ask you for other documents for further verification.

Tenure

The tenure ranges between a year to 10 years. However, you may extend it upon maturation. The process for the same varies from bank to bank.

Joint Account facility

An NRI can hold the NRE FDs with another individual. However, if the other holder is an Indian resident, they should comply with specific guidelines. For instance, they should be the primary account holder's close relative or family member. Also, the operations in such accounts are ‘Survivor or Former’ only. In other cases, the joint holder is an NRI. They must have valid proof to justify their NRI status too.

The salient features of an NRE Fixed Deposit Account

 A non-resident Fixed Deposit is widely known for its benefits. It acts as a lucrative investment option for global Indians. It allows them to deposit income earned overseas safely. Plus, it enables them to expand their savings effectively. An NRI Fixed Deposit Account has three types. A popular one is the Non-Resident External or NRE Fixed Deposits. It is a type meant for NRIs, and the following are the features that help you understand it better:

Repatriation

An NRE FD Account offers full repatriation. This means you can withdraw the principal amount and the interest earned. Hence, it appeals to the needs of many NRI investors.

Tax liability

Often, your interest earnings get affected by taxation. This further hampers your overall investment growth. But with NRE FD, you do not face this situation. Unlike other NRI FDs, it does not attract taxes. As a result, it makes for a better investment option for first-time investors.

Interest rates

The progress of an investment depends on various factors. But the most important one of them is the rate of interest. It plays a significant role in the growth of your deposit. It also determines the pace at which your invested funds increase. Precisely why, an NRE Fixed Deposit Account offers relatively high interest rates. It builds your investment quickly. Plus, the tax-free policy enables you to reap the actual benefits of an FD Account.

Fund sources

An NRE FD converts the deposited income earned overseas into Indian Rupee. This way, you may open an account with foreign currency. They automatically turn the funds into INR. It will also maintain the funds in the same manner.

Processing time

It does not take much time to open NRE Fixed Deposit External Account. The fastest mode is online. But if you cannot do that, you could also open offline. For this, visit the nearest branch of your bank. In either case, you need to present documents like:

• Permanent Account Number (PAN) Card or Form 60
• A valid Indian passport
• Proof of address (of both India and overseas) as per Customer Identification Policy
• Proof of NRI or Person of Indian Origin (PIO) status
• Recent passport size photographs

These are the basics. Your bank may ask you to submit other relevant documents. Once you do so, it should not take much time to open your NRE FD Account.

Know Which NRI Fixed Deposit Is Ideal For You

 When people move overseas, they may still want to sustain their Fixed Deposits. But a regular one will no longer suffice their needs. This is where a non-resident Indian Fixed Deposit Account comes into the picture. It is a Deposit Account specifically meant for global Indians. An NRI Fixed Deposit serves as a safe investment option. It allows NRIs to deposit the income earned overseas quickly.

It also lets them make steady earnings through their deposits. This way, they need not seek other investment options that they are unsure of.  Also, such accounts are of three kinds. Each meets a specific financial need. Thus, to reap the benefits of your FD Account, know about them in detail:

Non-Resident External (NRE) Fixed Deposit Account

If you are an NRI earning in foreign currency, opt for an NRE Fixed Deposits. It automatically converts your deposits into Indian Rupees. Plus, it maintains your investment in INR for the deposit duration. Such FD Accounts also offer full repatriation. This means you may withdraw the principal amount and the interest earned. Moreover, the interest earned on your deposit is exempt from taxes.

Non-Resident Ordinary (NRO) Fixed Deposit Account

An NRO Fixed Deposit is ideal for those who earn income from India. If you move to the US and in your absence, you have put your house on rent. Now, the rent is the income you earn from India. This type of NRI FD enables joint holdings. So, open it with an Indian resident or another NRI.

Foreign Currency Non-Resident (FCNR) Deposit Account

The third type is an FCNR Deposit Account. It lets you deposit funds in freely convertible currencies accepted worldwide. Hence, it is suitable for individuals who keep moving overseas for work. An FCNR FD also holds other benefits. For instance, it lets you maintain the deposited amount in the original foreign currency. The following are the currencies accepted under this NRI Fixed Deposit Account:

• US Dollar (USD)
• Australian Dollar (AUD)
• Great Britain Pound (GBP)
• Canadian Dollar (CAD)
• Japanese Yen (JPY)
• Hong Kong Dollar (HKD)
• Singapore Dollar (SGD)

The minimum and maximum deposits of these currencies depend on your bank.

Before you open NRI Fixed Deposit Account, remember the following things:

1. Taxation

Always consider the taxation policy of an NRI FD Account. It plays a significant role in your total investment.

2. Financial goals

Be sure of your financial goals before you start investing. This includes both short and long-termed ones.

3. Duration

Each type of FD has a minimum and maximum duration. For instance, the minimum duration of an NRE FD is a year. So, be mindful of this when you select one.