Understanding The Difference Between Checking And Savings Accounts

We all need Bank Accounts to keep our money safe and optimise it rightly. You can select from different accounts, including Checking, Savings, and Salary Accounts. The decision to open a Checking and Saving Account depends on the purpose and the level of accessibility required.

To grasp the distinction between a Checking and Saving Bank Account, understand the meaning of both.

What is Checking Account?

This gets used for paying your daily costs. They are simple and do not have any restrictions on withdrawals. You can use it to pay bills, make online purchases, and carry out other routine operations. When you open this account, the bank offers a Debit Card, chequebook, and a passbook. Use the Online and Mobile Banking features to access your money from anywhere. Meanwhile, a Checking Account does not provide much interest.

What is Savings Account?

This lets you save money and build your capital by depositing funds regularly. It is a place where you can place funds that you do not require. Savings Accounts, unlike Checking Accounts, have a few limitations on how they can get used. For example, you can only withdraw money from banks and ATMs many times.

Your Savings Account comes with a Debit Card, passbook, chequebook, and Internet Banking, much like a Checking Account. However, unlike the Checking Account, the Savings Account pays out interest semi-annually or annually on deposited cash.

Difference Between Checking and Savings Account

Account Fees

Most transactions carried out through Checking Account are subject to a fee: ATM, overdraft protection, online access fees, etc. A Savings Account, meanwhile, is free of cost online. A bank only charges you if you exceed your money withdrawal limit or fail to meet the bank's minimum balance criteria.

Transaction frequency

Do at least one transaction monthly if you have a Checking Account. Your bank charges you a monthly maintenance fee if you do not comply. If you have a Savings Account, make a transaction once every six months to keep it active. The bank classifies your account, and the Debit Card associated with it becomes dormant if there is no activity. You can use a banking app to make sure the account is active.

Interest pay-out

The most notable distinction between Checking and Savings Account provides interest rates. Checking Accounts normally earn little to no interest from banks. You get interest on your deposits in a Savings Account. The Savings Account interest rates vary between banks and get decided mainly by the type of account you open and the amount you deposit.

How to select a Bank?

The most financial decision is selecting a bank to manage your funds. Different banks offer various services, fees, and Savings Account interest rates.

Types of Banks

The banks ideal for you is the essential factor to consider. Every bank has its set of pros and cons.

Traditional banks

When people think of a bank, they think of the traditional ones, who primarily provide facilities to their customers through a network of physical locations and supply ATMs to their and other banks' customers. Most are considering Online Banking services for bill payments and deposits. Even though traditional banks have been around the longest, fewer reasons to pick them over competitors. Both charge lower fees than typical banks.

However, choose to conduct your financial transactions personally. If you have a query or a problem, speak to someone about it in your local branch. This indicates that a traditional bank is the best option for you. However, it is best to check the alternative options accessible to you.

Online banks

These were uncommon 20 years ago, but their popularity has grown with time, and they now compete directly with traditional ones. Because internet banks have fewer or no physical branches, they have lower overhead costs than standard ones, which means their fees are often lower. These banks offer to have a banking app that lets you make banking transactions.

The difference between online and traditional banks has increasingly blurred in recent years, as the latter's digital services and technologies have evolved. This implies that you can get the benefits of a traditional branch while also taking advantage of the convenience of Internet Banking.

Fees and interest rates

The fees and rates charged are other aspects to examine when deciding where to bank. Most hold two types of accounts: a Checking and a Saving Account. The features vary depending on the type of account you open, and it is common to have various accounts with multiple banks.

Interest rates

Look for a unique set of features in your Savings Account. As you do not use the Saving Bank Account often, you can handle them online. Most of them do not charge excessive fees if you do not make frequent withdrawals. Instead, the fundamental distinction between these accounts is the interests they pay. The best rates are found through credit unions or internet banks. Shop around for the best interest rates.

How Is A Savings Account Unique?

One of the first accounts we ever open is Savings Account. Whether it is an account we open as a minor with our parents or as an adult, a Regular Saving Account helps inculcate a sense of financial discipline. It encourages us to save money while we are young. Yet, most use these accounts for basic transactions like cash deposit and withdrawal as they are unaware of its uniqueness, which are:

Easy, anytime transactions

The best part about modern-day accounts is they are anytime, anywhere. This attributes to the fact that all banks today offer Digital Banking services. You need to set up your Online Banking account and download the banking app. It lets you send and receive payments quickly.

Bill payments and online shopping

You can use your Bank Saving Account to pay all your utility bills. They get paid in cash, cheque, or online transactions. Use Internet Banking channels to pay for your online shopping orders, eliminating the need for cash. 

Debit and ATM cards

When you open a Bank Account, your bank sends across a welcome kit. This kit includes two things: your Online Banking details and a Debit or ATM Card. Those uncomfortable with online transactions use their Debit Cards to withdraw cash. Use it to shop online, and retail stores and the money gets directly debited from your account. 

Balance maintenance

This is a prerequisite you should know before an online Saving Account opening. Banks always decide the minimum amount to park in the account, failing which you get charged a penalty for non-maintenance. If you hold an account in a public sector bank, you may need to maintain up to Rs. 1,000. 

Private sector banks, meanwhile, require you to maintain a minimum balance between Rs. 10,000 to Rs. 1 lakh. There are also special Zero-Balance Accounts, called Salary Accounts, that do not require minimum balance maintenance. 

Interest rates

The savings parked in your account earn you interest. Depending upon the bank where you hold account, the amount parked, and the balance maintained, you make decent Savings interest rates on them. While the interest rate is not that high, banks still provide a bonus and disburse it once or twice a year. Generally, it ranges between 3.5% to 7%. 

Deposits and withdrawals

There are no specified limits on the money you can deposit in your account. However, banks have a limit on the withdrawal amount and the frequency of withdrawals. You can make up to five withdrawals a month. Also, there is a limit on ATM withdrawals wherein you use your bank ATM and other ATMs three to five times a month. If you use other bank ATMs over the free prescribed limit, you get charged a small fee for the same. 

The Saving Account is famous for these reasons. If operated responsibly, your account serves as the first investment instrument that boosts your corpus.

How To Open Savings Account Online?

That the world has become digitally connected. Today, there is nothing you cannot do online. From online shopping to market investment, everything happens online. Banks also offer Digital Banking facilities, through which you can send and receive money in your account within seconds. 

The banking sector has moved forward and started enabling customers to do online Saving Account opening. Here are the steps for doing so:

Research 

The provision to open an online Bank Account is relatively new. Not all banks offer this facility. So, before you can open one online, research about the banks offering this facility. A simple search helps you find banks that enable online account opening. Most private sector banks offer this facility, while only a few in the public sector currently have this provision. 

Decide account type

Once shortlisted, visit their website, and choose the Saving Account you want to open. Most banks allow you to open different accounts, including Joint, Minor, Senior Citizens, Women, Zero-Balance, and accounts under various government schemes. Choose the type you wish to open and then move to the next step. Note, you cannot open a Current Account online.

Account opening form

After selecting the type, fill the account opening form. This is a basic form where you add details like your name, address, contact details, PAN Card number, and account type you intend to open. Affix your passport size photograph on the desired section and submit soft copies of all the documents listed. These include your ID and address proofs. According to Government rules, submit a photocopy of your PAN card. 

Remember, select the Online Banking facility while filing the account opening form. Review the form and submit it

Bank evaluation 

Once submitted the form, the bank assesses your application for opening the Saving Bank Account. This process takes between seven to 14 days. If your account opening request gets accepted, the bank informs you about the same through the e-mail address you mentioned on the account opening form. They ask you to complete the e-KYC process

Complete e-KYC process

Get done with the e-KYC formality where you provide a photocopy of your ID, address and PAN card and self-attest it. Once your e-KYC details are submitted, the bank assigns your account details in the mail. You get a login ID and password to your account, through which you can access and conduct other financial transactions. The bank also sends your account opening kit featuring your chequebook, passbook, and ATM and Debit Card via post.

Online accounts are ideal for modern-day customers. If you find them convenient and comfortable, you need not opt for traditional means anymore.

What You Should Know About Zero-Balance Savings Account

We all need a Bank Account for parking your savings and operate other financial transactions. A Saving Account is the first account we open, through which we gradually build our life savings. People mostly have joint or minor accounts with their parents, which gets converted into a regular account by 18 years. However, a Zero-Balance Account is the first individual account you open. 

Here are some essential facts about the Zero-Balance Account:

Meaning and Definition

This Saving Bank Account, also called a Salary Account, is what employers open for you. The employer typically ties up with a specific bank to offer them and deposits your monthly income in it. The account gets credited with your salary on a specific date of every month. Besides your income, the employer deposits variable pay such as monthly incentives, year-end bonuses, cash rewards, and more in the Zero-Balance Account. 

Why Zero-Balance?

This account is called Zero-Balance Savings Account because there are no restrictions on withdrawing the sums parked. You can remove every rupee deposited by your company without worrying about maintaining an average monthly balance (which is a prerequisite for all other types of online Bank Account). However, check your bank’s daily withdrawal limits before removing the entire sum parked. 

Basic facilities offered 

Banks typically offer a host of facilities, like those provided with a standard account. For instance, you get a chequebook, passbook, and ATM or Debit Card. In most cases, banks offer an instant kit while opening such accounts. You also receive your Net Banking details in the welcome kit. Set up your Digital Banking account, post which you can access online facilities through facilities like NEFT, IMPS, RTGS, etc.

Additional facilities offered 

Every ATM or Debit Card comes with additional services, over and above the general facilities provided. For example, you get a Debit Card with higher withdrawal limits or a high daily shopping limit. You earn extra rewards and cashback for every transaction via Debit Cards. If you draw a higher monthly income in your account, the bank provides access to facilities like fuel surcharge, free airport lounge access, free movie tickets, and so on. 

What to do if an employer does not offer Zero-Balance Account?

Most companies that are relatively small do not have the facility of a Zero-Balance Account. However, suppose the employees wish to do an online Saving Account opening for salary deposits. In that case, they can approach a bank offering the same with relevant documents that include their income and employment proof. Log in to your preferred bank with your offer letter and your most recent salary slips. The bank also asks for a recent letter from your employer validating your designation and monthly income. Once opened, you can share your account details with your employer and start enjoying the facilities that come with the account

What Are The Features Of Digital Banking?

Technology caused the biggest shift in the banking sector over the years. It changed the way they engage with customers and each other. The shape of established retail banks is changing, driven by the challenge of fast, focused digital new entrants capturing the market. They made processes and applications convenient to access for everyone worldwide.

Digital banking is the digitisation of all traditional banking activities and programmes historically available to customers when physically inside the branch. It includes money deposits, withdrawals, transfers, Bank Account management, financial product applications, loan management, bill payments, and other account services.

Features

Digital banking in India is accessible on PC, smartphone, or tablet. It is also far better than visiting the bank branch. There are several features you enjoy by adopting this method.

Online banking

It provides you with the luxury of banking anytime, anywhere. Website services offered are available 24*7. To facilitate online use, banks provide online banking apps with a host of high-quality technology solutions to make the banking experience easy and fast. Some services include account summary, transaction history, checking account statement and balance, online payments, and fund transfer.

Personal finance planning

There is lots of competition in the banking sector. Hence, they come up with advanced websites and processes to ease online Saving Account opening. Some features include loan calculators, premium calculators, financial planning tools, investment tools, budgeting, forecasting, and tax preparation. It becomes simpler for you to select the Bank Account and calculate the interest rates.

Mobile banking

It is a service provided by a bank or financial institution, allowing customers to conduct financial transactions remotely using a smartphone or tablet. Unlike internet banking, it uses software or an app provided by the financial institution for this purpose. Mobile banking is usually accessible anytime.

Unified Payment Interface

Nowadays, you make transactions from your mobile phone from any location. Thanks to the integration of UPI and online banking solutions, customers transfer money between accounts easily. UPI is an instant real-time payment system developed by the National Payments Corporation of India facilitating inter-bank transactions directly to the Saving Account.

Phone banking

It is famous for people with a primary phone without a data connection. The services include SMS, missed call, and USSD banking. Those who lack an online Bank Account use them from anywhere. They are free services offering cashless transactions.

Digital wallet

Mobile wallets are popular too. They are the best technological innovations and allow you to pay directly from your smartphone. Millions of people use them for payments. Some popular options are PayTM, MobiKwik, JioMoney, State Bank Buddy, etc.

A Detailed Guide On The Facilities Offered Under Online Savings Account

Today, all public and private sector banks offer savings account. You can use them for parking and growing your savings gradually. The moment you begin earning, you can open the account if you do not hold one. While some organisations do offer an account for depositing the salary, consider opening a regular one with which you can enjoy a host of benefits. Thanks to digital banking, you can open an account in minutes online. 

Here are some of the most generic facilities which banks offer on online saving account opening: 

Usage of account for daily transactions 

The essential feature of the account is it lets you conduct all types of daily transactions. There is no upper cap on the sum you can deposit in the account. Deposit the money through cash, cheque, or online transactions through various accounts. However, banks have a daily withdrawal limit on such accounts. Generally, the withdrawal limits are higher when you remove cash from the bank branch than the ATM. 

Provides ATM or debit card 

All Indian banks offer an ATM or debit card in the saving account welcome kit. The ATM card includes your name, a 16-digit code, and the expiration or validity date on the front, while the CVV number with the signature strip on the back. You use the ATM card for withdrawing funds from any ATM vestibule. However, you should check the number of transactions possible through ATM, be it home bank or otherwise. 

Besides withdrawing cash at the ATM, use the card for shopping at retail stores and online portals. You can use them for paying the utility bills as well. 

Net banking services 

You already have opened the account online. Now, you can explore more opportunities here. You can do transactions often, check your account balance, download the bank statement, transfer funds through NEFT, RTGS, or IMPS modes. You have the provisions to pay the utility bills, house rent, loan EMIs, and other monthly expenses directly through the account. You can even set up login details in the banking apps for on the move transactions. 

Earn interests on the savings 

Every bank offers savings interest rates on the balanced parked. The interest rates offered are generally not too high, but you can earn higher interest rates under the online mode. It is also applicable for those who have maintained higher deposits in the account, usually exceeding Rs. 1 lakh. The interest rates offered ranges between 4% to 7% depending on the bank and the savings. The interest pay-out also happens on a half-yearly or yearly basis. 

When you open the saving bank account, enquire about the different accounts you can open. Apart from the standard account, there is a joint account, zero-balance, accounts under various Government schemes, women, senior citizens, and minors.

6 Benefits Of Opening A Savings Account

Money is a resource which if saved today, can benefit the future. It is the only saviour during medical emergencies and other urgent fund requirements. Nowadays, every process and facility require money for initiation and completion. Without having enough funds and savings, it is impossible to fulfil even daily necessities. Remain prepared for any circumstance with the help of adequate cash and face all difficulties easily.

Banks offer many services to their customers, one of which is a savings account. It helps secure all the assets and cash and provides interest on it. As a bank account holder, you can withdraw funds conveniently without the fear of loss or theft. Here are some of the benefits it offers:

1. Creates an emergency corpus: With a saving account, you can prepare yourself financially to face any unplanned emergency. Whether it is a broken major appliance, automobile repair, or medical emergency, you can always withdraw the funds from the account at any time as it offers lots of liquidity. The amount in the bank account is sufficient to cover the expenses and escape the hassle of borrowing. 
   
   
2. Asset protection: You can also opt for an online saving account opening to store your assets. They are free from any impact from market volatilities. For instance, if you invest funds in real estate, bonds, and stocks, there are chances of getting higher returns on the investment than bank accounts. But you risk losing money in unforeseen circumstances where you get lower returns which is not the case with bank accounts. 
   
   
3. Hassle-free operations: Technology has changed the scenario of every sector, including banking. Nowadays, smartphones have become the prime mode of payments and banking with compatible mobile banking apps. It offers 24/7 service and makes funds available at any time of the day.   
   
   
4. Easy bill payments: One of the greatest advantages of having an online bank account is the freedom to pay pending utility, mobile recharge, credit card, and water bills directly from the bank. You need to enter your bank account and card details on the provider’s website and pay the bill. You receive an SMS and email alert of the transaction on your registered mobile number and email ID. 
   
   
5. Minimal amount requirement: It has become very convenient to operate a bank account with the minimal amount required for opening it, which can be as low as Rs. 500.
   
   
6. International debit card: When you open a bank account, you get a kit from the bank containing the passbook, chequebook, a debit card for cash withdrawals at ATMs and other necessary documents. You can activate the facility for international transactions on your debit card.

 

Steps To Open A Savings Bank Account Online

Banks and financial institutions provide the service of saving account to help manage your money. As the name suggests, these accounts encourage savings, and you earn interest while doing the same. It helps ensure your money is safe and accessible whenever you want.

With changing lifestyle, people getting busier is inevitable. Thus, banks have introduced facilities like banking apps, internet banking, online banking, etc., for convenience. Additionally, online banks have also gained momentum. It has resulted in accounts operating online. You can open your account online within minutes.

Following is the procedure of online saving account opening: 

Explore available options: Most of them give attractive interest rates and facilities. You can conduct research and compare banks to choose what suits you best. You compare them based on the minimum required balance, interest rates, monthly fees deducted, internet banking provisions, etc. 

Select account type: While opening a savings account, you can select from an array of accounts you want. Depending on your needs, you can opt for either a single or joint account. The latter requires you to share ownership and access to the funds with your co-owner. They can also withdraw the money without your permission. 

Documentation: You must submit documents like government-certified identity proof, address proof, PAN Card, and two to three passport-sized photographs. It would be best if you have these documents handy while applying online as there is a chance of session time out in case of delay. 

Submit account application: The application process gets completed within 10 minutes if you have all the documents ready. You can go to the website of the bank chosen. You will have to fill out details like your name, date of birth, address details and other personal details and attach the documents. The bank then gets back to you with further instructions.

Make a deposit: The last thing you need to do is make the initial deposit in your online bank account. You can do this either with your debit card or link your existing bank account through a routing number. If you wish to pay by cash, visit your nearest branch.

Once the process gets completed, banks send your debit card within 10-15 business days, through the welcome kit you receive when you open a bank account. You can use it to carry out all your online transactions and ATM withdrawals.

5 Benefits Of Having A Saving Account In The Bank

 People have lots of aspirations and expectations to achieve in life. They want to live life on their terms and make it perfect. They wish to accumulate as many funds as possible to meet future requirements and fulfill their desires. They earn to live a brighter future and save for emergencies and other expenses that need priority. Youngsters, especially, have lots of passion for achieving their goals but require having sufficient capital to meet them.

Here is where the concept of a saving account comes in. Banks offer different interest rates on these accounts and encourage customers to open an account with them to save for unexpected emergencies and manage funds sustainably. They can withdraw the deposited money at any time and use it for other expenses.

Nowadays, every service and product is available online, so are banking facilities. People can opt for an online saving account opening to escape standing in long queues outside banks and operate from any place in the world. They can check their account balance, transfer funds, monitor transactions, apply for new chequebooks and loans, etc., using the mobile banking app. Smartphone banking is another trend that is becoming popular by the day.

The following are the benefits customers get by opening a bank account:

1. It helps create emergency corpus: Having a savings account helps create emergency funds during unexpected monetary crises. Whether it involves repairing a broken appliance or a medical emergency, the liquidity of these accounts enables account holders to withdraw funds easily at any time. It saves them from running into debts.
   
   
2. It helps protect assets: The assets stored in the account are free from any impact due to market volatilities and fluctuations. For example, money invested in real estate has a chance of delivering higher returns. But, at the same time, unforeseen circumstances may make it difficult to get instant money. Hence, it is safer to get immediate funds with an online bank account opening with zero balance.
   
   
3. International debit card: Having a bank account in India allows account holders to convert their debit cards for global usage and facilities. They can travel all over the world and use it at bank ATMs for transactions.
   
   
4. Easy bill payments: With the help of a bank account, people can pay their credit card bills, utility bills, mobile bills, DTH recharges, etc. directly. They can access the facility on their smartphones and PCs.
   
   
5. Easy account operation: It is effortless to operate a. One can easily open it by visiting the bank branch. Many banks even give the option to extend it online by logging into the website of the bank. They are beneficial for zero balance saving accounts for young people who want to start saving or learning how a bank works.

Benefits of Opening An Online Saving Account

Since years, people have been securing their money in the savings accounts of their banks. It ensures mental satisfaction and asset security for all account holders. Those who have a saving account earn interest on it and use it as and when required. They are easily accessible to the respective account holder and offer services like fund transfers from other accounts using IMPS, RTGS, NEFT, or even UPI, where account holders can earn interest on their deposits.

The applicable interest rates range between 3.5 per cent to 7 per cent per annum and differ bank to bank. Customers have the liberty to deposit or withdraw their money by submitting cheques or withdrawal slips. They can also take the help of ATMs to solve the purpose by applying for debit cards linked to their bank accounts.

The key features of saving accounts
A saving account helps customers track the inflow and outflow of money from their accounts. They enable banks to provide passbooks, debit-cum-ATM cards, cheque leaflets, internet banking facilities, bank statements, and even free SMS and email alerts for every transaction made. Bank account holders have unique and personalised account numbers with no limitation on deposits. Linking recurring deposits or even EMIs to the savings account is possible.

Types of accounts available
There are two types of accounts available:

• Minimum Balance Accounts: Initially, customers had to maintain a minimum balance in their account for the same to remain active. This policy varies, like the rates of interest offered by them. The account holder pays a fine for not following the rules and not maintaining minimum account balance.
• Zero Balance Accounts: With a change in banking services, zero balance accounts have also come in to effect. People convert regular saving accounts to zero balance accounts so that they avoid the penalties in future. Zero balance saving account services are also available.

The eligibility criteria
Those interested in opening accounts in banks need to follow some standard eligibility criteria laid down by banks.

1. The account holder should be a resident of India.
2. The age limit to open bank accounts is 18 years and above. Accounts are available for minors as well that are taken care of by parents/guardians.

There are many eligibility calculators online that can help users determine their eligibility to open bank accounts.

Benefits of opening online savings accounts
Technology has emerged as a winner for all the fields of business and banking. It ensures quick and safe connectivity within parties. The accounts used to save resources, such as income, can be tracked and used to make transactions via the internet or mobile banking apps. Online bank account opening with zero-balance helps increase accessibility by making themselves available on online banking platforms. Online documentation services are also available like KYC. Customers can contact helpline numbers through calls and emails for clarifications of queries or report of issues.

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.

Why Is Zero-Balance Savings Account Popular?

When you visit a bank to open an account, you have numerous options to choose from. For choosing an account that best suits your needs, you must first understand the concepts behind each one of them and be aware of their underlying differences.

Zero-balance savings account
A zero-balance saving account offers you the facility to open an account with no need of minimum balance at the time of opening an account. Usually provided by major banks, zero-balance savings account assists you to withdraw money as and when required, thus addressing your liquidity needs.
In most cases, the account offers additional facilities such as ATM cum debit card, mobile banking, internet banking, and online money transfer.

This saving account is given to the class of customers such as salary account holders and under the Pradhan Mantri Jan Dhan Yojana. PMJDY is a scheme with the aim of financial inclusion.

Features of zero-balance account

• No restrictions on maintaining a regular monthly balance.
• No charges levied on the debit card or ATM card.
• Free passbook issued at the time of opening the account.
• Free net banking facility to account holders.
• Offers unique benefits for salary account holders based on the businesses

Difference between Zero balance savings account and regular savings account
Generally, you must keep a minimum Monthly Average Balance (MAB) in your regular savings account. If it is challenging to maintain the minimum required balance in your account, non-maintenance charges will be levied

Documents required:
For opening the zero-balance saving account, you just must submit the necessary KYC documents like identity and residence proof.

Other benefits of zero balance savings account
High-interest rates: When you open zero-balance savings account online, the interest rates are higher than the manual option. Although no minimum balance is considered for this purpose, the online route has more advantages.

Easy to open: Your PAN and Aadhaar are enough to open zero-balance account. You need to set a PIN then and start using the account. The welcome kit will also contain chequebook and a debit card which is integrated with the mobile banking apps.

No KYC balance up to INR 1 lakh: Such accounts allow you to maintain a certain amount of funds, especially for new holders. The maximum permitted balance by banks is INR 1 lakh.

Transaction charges: One of the many perks is zero transaction costs. If you wish to withdraw or deposit some funds, do not worry about deduction or transaction costs. Mobile banking apps need a unique authentication password known as mPIN for authenticating payments and transactions.

Shopping and entertainment: These are two areas of life that no one wants to comprise on. The virtual debit card enables you to pay for your favourite product at all the sales terminals.

Benefits of savings account opened under PMJDY

• Not required to keep a minimum balance.
• Interest on deposits as per current bank rates.
• Accident-insurance cover of Rs. 1 lakh.
• Direct transfer from government schemes is credited in the account.
• Your have overdraft facility also available for 6 months.

Everything You Need To Know About Kids Savings Account

In these times, it is very important for a child to know basics of personal finance. Teaching your child through live examples is a better way to ensure long lasting learning and retention. Recognizing this, banks have come out with a different type of saving account specially for kids. They can operate this account and learn the basics about a savings account.

There is no need to wait till your child is 18 years before opening one. You can open zero balance account and give your child the responsibility of managing this account.

Features of Kids saving account:
The account is a zero-balance account which means there is no need to maintain a set balance in it. The account is linked to the parent or guardian’s bank account. In case the balance is zero, funds can be transferred from the linked account to the kids saving account. However, a few banks may insist on a minimum balance. So, it is better to check the rules before opening this account.

The account comes with a free debit card that the child can use to make cash withdrawals from ATM to swipe at merchant outlets. The debit card comes with a shopping limit, which means that your child won’t be able to spend more than the limit.

Banks also provide free cheque books, free passbooks, free email account statements. The account holder can also use internet banking and mobile banking. It is also possible to pay bills through this account.

This account is only in operation when the child is a minor. Once the child is a major, a regular savings account must be opened. It is possible to convert this zero-balance saving account into a regular saving account by filling up a form.

Banks may also offer a sweep in facility where funds above a particular limit are put into a fixed deposit. This ensures the savings account earns higher income.

Most banks require an auto debit facility to transfer funds from the parent or guardian’s account to the kids saving account to maintain a balance.

Some banks also provide free insurance to cover the child in case of the parent’s death.

How to open a kids savings account:
It is possible to open online saving account in this case by filling up a form on the bank’s website. Considering it is the era of e-banking apps, you could open one via your smartphones as well. Else, visit the branch and complete the procedure.

The documents required for this account are:

• KYC documents of the parent or guardian, if the child is less than 10 years of age
• Date of birth proof for example, birth certificate

Not all banks may require a passport size photograph. Once the application for online saving account opening is processed, your child’s saving account gets opened in a jiffy. Your child can then start to operate this account.

6 Features Of Opening A Saving Account

A saving account is an efficient way of saving funds for future expenses. A saving account will offer an interest rate which is slightly higher than the rate of inflation, for keeping the real value of money stable throughout the years. Any individual can go for an online saving account opening by just visiting the official website of the financial institution.

A lot of modern financial institutions that offer a saving account are providing these accounts which are packed with great offers and quick links for paying bills and making quick transactions. Interest rates offered on a saving account will differ at different financial institutions.
A saving account will help an individual cover any type of unexpected expenses which may arise in the future. Holding a savings account will help improve financial stability as the funds in the account have limits on the number of withdrawals made against the account. A bank will customize a saving account depending on the general usage an account witnesses in a lifetime.

A saving account is a type of account which is opened at a bank or any other financial institution which earns a moderate interest on the balance maintained. A saving account is essentially opened for putting aside some funds which are not required immediately. A bank will place restrictions on the number of withdrawals which can be made from the account every month. Interest rates which are earned on the savings account are determined based on.

Some of the features of opening a saving account are listed below:

1. As the name suggests, a saving account is a safe place for storing surplus funds obtained by the customer. These surplus funds help in building a nest egg for any type of unexpected situations which may arise any time in the future.
2. Every saving account, whether held at a nationalized financial institution or any other financial institutions, is always safe.
3. A balance in the saving account earns interest. While the interest rate may not be as high as other bank deposits, as the funds are not withdrawn on a regular basis, it continues to increase the funds in the account.
4. A saving account is provided the account holders some level of liquidity. Financial institutions usually provide account holders with debit or ATM cards which can be used for making a certain number of withdrawals from their savings account.
5. A lot of financial institutions provide a saving account with different insurance covers including personal accidents and death.

An added benefit of a lot of saving account holders is that a lot of financial institutions offer great discounts on the locker rental facilities for customers who maintain the minimum quarterly balance.