What Is The Process To Open A Bank Account In India?

Funds are a saviour in every life, like emergencies, as they solve most of your problems by making you financially stable and independent. You escape the burden of borrowing money from relatives and landing in debt owing to low repayment capacity. Save money today for a brighter and more secure future.

Banks encourage customers and citizens to open a Saving Bank Account to store funds and access them anytime. You benefit from the interest on the idle funds in the account and flexible usage. You also invest in other banking products like Mutual Funds, Deposits, and government schemes for earning higher returns.

Procedure

Digital technology overtook manual processes, thus reducing frequent visits to the bank for minor tasks, such as fund transfers or checking account balances. Now, operate your finances with a few taps or clicks on your smartphones and PCs. Follow these steps:

Visit the app

For an online Saving Account opening, you need access to the Banking app or the bank portal. Enter your mobile number, upload the documents, and fill out the application form to initiate the process. Likewise, you escape frequent visits to the bank and the complicated paperwork involved.

Documents required

Regardless of which method you choose, provide certain documents as proof while opening the account. These include your Aadhaar card, passport, driving license, PAN card, Form 16 (if no PAN card), and two passport-sized photographs.

Video KYC

For an online Bank Account, own a camera and audio enabled device. Once they notify you of your KYC process appointment details, ensure that the documents are in the digital form or available on DigiLocker. You receive a video call link on your phone or email from an executive conducting the KYC. Answer basic details such as your name, birth date, Aadhaar details, etc. The executive captures your live photo and scans the KYC documents.

Bank documents delivery

The Welcome Kit sent to the customer is enclosed with a welcome letter, cheque book, and other details. You can open a joint account with the bank where both account holders receive the respective documents for individual operations. Download the app for ease of access.

Access full banking features

You are a few clicks away from conducting high-value transactions with Digital Banking. Whether you wish to check your account balances or the latest transaction statements, do it by logging in. Initiate fund transfers to payees in India and abroad and avail preferential currency rates on international fund transfers.

Conclusion

Technology and banking have progressed. With the rise in smartphone users, everyone relies on apps for completing transactions. It is a clever move, slowly gaining the customers’ trust in India. 

How To Earn Higher Savings Account Interest Rates?

It is essential to have financial stability in today’s world. Seeing the rise in prices and the cost of living, each person should have the income to meet them and fulfil their desires. Nothing is available for free, and every vendor requires something in exchange for what they sell to customers. Money is the primary element necessary to meet your expenses and fulfil your aspirations.

A Savings Account provides safety and much-needed liquidity for our funds. It is a famous low-return option to park your money. However, increase the income from your account deposit by following these tips:

Higher interest rates online

Many Online Banking platforms and financial institutions provide decent interest rates. If you find a credible one offering them, you invest there to earn extra interest income. But ensure that the maintenance or other additional charges do not wipe off any savings you make. Explore online for better returns.

Idle fund utilisation

You benefit from the sweep-in and sweep-out facilities in your online Bank Account to generate higher interest income from idle funds. Your surplus funds get swept out to a Fixed Deposit income, automatically yielding a higher return rate. Sweep the money into your Bank Account if you need cash urgently.

Criteria-based accounts

Check with your banker for a higher return on some Savings Accounts with specific criteria like a higher minimum balance, a specific number of Debit Card transactions, etc. Open a high-yield Internet Banking Account if you find such criteria acceptable.

Demography-based accounts

Most banks have specific accounts for children, youth, senior citizens, etc., offering a higher interest rate than regular ones. If you have a kid, open a Bank Account on the Banking app, deposit money there, and enjoy higher returns.

Regular interest credits

Your banker provides monthly interest credits on your Bank Account. If you maintain a decent balance, use your monthly interest credit for other investment purposes. Digital technology has transformed the banking scenario. For instance, open a SIP and deposit the interest income each month using M Banking.

Certificates of Deposit

Use your funds for investing in Certificates of Deposit, like Fixed Deposits. In India, scheduled commercial banks and other institutes are eligible for issuing CDs with a tenure of three months to a year. Reinvest the matured CD to continue earning higher interest than a Savings Bank Account. 

Conclusion

You earn a higher interest income while enjoying the Bank Account benefits by following these tips. Share Market Investments are also possible with idle funds. While your income increases, your funds remain liquid and ready for use.

What Are Different Savings Accounts Offered?

The Indian population is vast and diverse. They have varying needs and financial capacities. Your lifestyle and choices are different from others. Hence, you need a financial product to understand your requirements. Spend wisely and living well is a motto that applies to each Indian, whether youth or senior citizen. The Savings Account stores extra cash, earns interest, and allows access to it whenever required.

Deposit funds either by cash or cheques or transfer money from other accounts using IMPS, NEFT, RTGS, or UPI.

Types

Recently, banks are offering different Saving Bank Account to cater to customers from other age groups and work domains. Open any Bank Account according to your eligibility and requirement:

Zero Balance Account

This is a financial product banks offer to operate freely without maintaining a minimum balance. Unlike regular accounts, Zero Balance Accounts do not come with limitations like maintaining a minimum balance. The applicant submits the essential KYC documents on the Banking app.

Basic Account

A regular online Bank Account features minimum facilities and introductory rates for services. You must maintain the prescribed minimum balance to avoid extra charges. You save time, effort, and travel costs by using the app for all your banking needs.

Salary Account

Only a salaried person can open a Bank Account to receive the salary. Most companies directly deposit the employee’s monthly salary here. Suppose the monthly wage is not credited for two to three months in the account. In that case, it gets automatically converted from Zero Balance to a regular account with minimum balance requirements.

Comparison

It is imperative to make a well-researched choice. Compare the options against diverse parameters to maximise your earnings and earn better rewards while online Saving Account opening. The following are numerous parameters to consider:

Interest rates

Most banks offer at least 3.5% on Savings Account interest. Others offer up to 7% interest rates, provided you maintain a minimum balance.

Minimum balance

You need to maintain a minimum balance for most accounts, except Zero Balance Accounts. If you fail to do so, the bank charges a penalty.

Additional facilities

Banks offer other facilities with the Bank Account, such as Net and Mobile Banking, doorstep cash deposit, withdrawal, free cheque book, etc. This way, you complete bank transactions from the comfort of your home or office. Consider the bank which offers deals on Debit Cards and other perks.

Conclusion

Use third-party websites to check the reviews and compare different Bank Accounts. Enquire about every detail, including the bonuses and services offered, to make informed decisions.

Know The Types Of Payment Methods Used For Remittance

Indians living abroad has become the norm for pursuing higher education and conducting business. When you move overseas as a student, on a business, or as a migrant worker, you may need to send money back home for financial upkeep. Finding the right International Money Transfer service becomes essential if this is a standard requirement. You do this by analysing the costs, transfer time, exchange rates, suitability, etc.

Now, there are several types of payment methods. The service you routinely opt for is not necessarily the best for all transactions. Specific mediums are best suited for payments. You must figure out this aspect to choose the correct mode to send money overseas. This helps you save costs and find an apt solution for your transfer needs. Let us understand the types of Remittance and payment modes for the same.

Types of Remittances

1. Inward: It refers to the funds you receive in your Bank Account domestically or internationally. For instance, if you get funds from a relative living abroad in your local account in India, it is called Inward International Remittance. This is the most common type of transfer as Indians support their family in India by making international transfers.
2. Outward: It is an outward transfer when you send money abroad from your local Bank Account. For example, parents in India pay for their child's higher education overseas by using the International Fund Transfer service.

You have the choice of the following payment methods to carry out Inward and Outward international transfers:

Wire transfer

This is one of the most favoured methods to send money from India to the USA. It also works well with all kinds of international transfers. It is the relatively latest mode that comes with lower fees. Almost all financial institutions, including banks and authorised money exchanges, offer this transfer service. It takes three to five business days to send funds through this medium. You may track the same through the International Money Transfer app.

Bank drafts

Cashier cheques and bank drafts are available at various banks across the country. You can physically purchase the drafts or cheques in the recipient country's currency. This is another cheaper method to send money overseas. However, it takes the longest to transfer funds through this medium. On the brighter side, the drafts are traceable to check if they reach the destination.

Online Money Transfer

If you are looking for a hassle-free and straightforward method, Foreign Remittance is the apt choice. Most Indians use it to make international transfers. The process requires you to enter the recipient's account details, destination information, contact number, etc. Additionally, it uses a Society for Worldwide Interbank Financial Telecommunication code. This is used to recognise the bank branch in the destination country.

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.