What Is A Savings Account?

In a situation where an individual has earned a surplus amount or got funds which they do not want to use and keep it safely, what are they to do? Stuff the funds under their bed? Keep it in a secure location that only they know about? No. Financial institutions and banks have a safe tool that is called a saving account. It is the most lucrative instrument offered by financial institutions and banks. In a situation where an individual has got surplus funds, and they wish to park it in a haven, a saving account comes handy.

The upside to holding an amount in a savings account is that the individual can earn interest on the amount and gets access to it any time they want. A saving account can be helpful in specific situations where imminent funding is required. It is a safe banking tool used by customers to make sure their money is always accessible. Funds can be deposited in the account through cash or cheques. As the name suggests, it is a great way to save funds for future.

One of the most famous by-products of a saving account is a zero balance saving account. Several banks have evolved with the ever-growing technological industry and provided their customers with the online option as well. These features have revolutionised the banking industry and made things easier than ever. Generally, these accounts are offered to individuals with weak economic backgrounds. A zero-balance account holder need not maintain any minimum balance. Primary KYC documents are required for opening these accounts.

Reasons why opening a saving account is a reliable option always –

1. Different accounts offered by these institutes nowadays come with desired features and provide links to pay bills, help in making secure transactions to the account holder as they log into their account.

2. Holding a saving account can quickly help an individual’s financial status as there is a limit on the number of transactions they can make with the account.

3. Generally, a saving account offers an interest rate which is slightly higher than the inflation rate for keeping the value of money stable.

4. Any unexpected situation that requires immediate funding can be dealt with if an individual has the account intact.

5. Financial institutions and banks have also customised the account depending on the specific types of usage.

Online saving account opening at the same bank as an individual’s primary account can provide many benefits, and it can be convenient for them. As transfers between accounts within the same bank or financial institution become convenient. A lot of banks also allow an individual to open more than one saving account that can be handy if they want to keep track of their savings.

All You Need to Know About A Pension Account

Savings account is the most basic type of bank account that banks offer. This account offers interest income along with moderate liquidity as well as a safe avenue to park funds.

Banks offer customised saving account for different types of customers. One type of saving account that they offer is called a pension account. This account is a special one for pensioners to receive credits for their pensions from their companies or from pension funds.

This account can be opened by:

• A Central Government or Civil Ministry employee who is covered under the Central Government Civil Pension Scheme. This scheme is operated by Central Pension Accounting Office, Department of Expenditure and Ministry of Finance
• Defence employees under Ministry of Defence (Army, Navy, Air Force) covered under Defence Pension Scheme of the respective Pension Sanctioning Unit i.e any retired or retiring Officer or Defence Civilian
• Employees working in an organization with 20 employees or more that is covered by Employees Pension Scheme.
• Existing members of ‘Members of Employees’ Family pension scheme.

A pension account is a zero-balance saving account. This means that the pensioner does not need to maintain any minimum balance in the account. The entire pension amount can be withdrawn without any fear of penalties. Generally, for a regular savings account, each bank has some minimum balance requirement. If this is not met, banks debit a certain penalty from the account. However, there is no such condition for a pension account.

Most banks provide regular saving account benefits to this account such as free cheque book, net banking and mobile banking apps, free ATM cum debit card. They also pay some amount of interest on the pension balance. It can be used to make bill payments as well.

The pensioner will need to submit the bank account details to the employer so that it can be added to the pension payment order. This PPO once filled will have to be submitted to the bank following which the pension will be collected. The bank will submit the request to the employer and pensions will get paid to the account every month.

However, this account can’t be opened at any time. It must be opened in the individual’s name after retirement or 6 months before retirement.

How to open a pension savings account?

It is possible to do zero balance account opening online. The account opening procedure is streamlined and once you fill up a form, the bank’s customer care executive will contact you to get your documents collected.

It is very easy to open zero balance saving account offline as well. You will need to go to the bank branch and fill up an account opening form and provide the required documentation. Once this application is processed, the bank account will be opened.

Documents required for a pension savings account

• Passport size photos
• Address proof (Passport, Aadhar card, Voter ID, Driving Licence, Electricity bill, Telephone bill, Gas bill, Lease rental papers, Purchase Documents, Home loan, Ration card)
• Identity proof (PAN card, passport, Aadhar card, Voter ID, Driving License)

This account can be opened in an individual name or jointly with the spouse. It is very easy to operate this zero-balance saving account and it can help the pensioners manage their funds post retirement.