How to choose the right savings account?
Several government-run policies and the digital revolution have provided the much-needed fillip to the banking sector in India. The transformation in the banking services opens a gamut of opportunities for the unbanked as well as for those who already use banking services. It draws upon the very critical question of how to choose the right savings account, as every bank offers a savings account but differs in its operating cost and products based on the services offered.
It is certainly necessary to consider the following aspects, if you are thinking about opening a savings bank account:
- Location of the bank: It is recommended to choose a bank that has a branch in your vicinity. This will make commuting easy as you can simply walk down to the branch. Moreover, the charges on any transaction made in the home branch are less so, if you choose a bank that is near your location, you can cut back transaction costs too.
- Balance Requirement: People are required to maintain a standard monthly or quarterly balance in their savings account as stipulated by the bank. The standard balance amount to be maintained depends on the nature of your account. In case you are not keen on maintaining the balance, go for the ‘Basic Savings Bank Account’. But, the services and facilities offered in such type of accounts are limited. You can opt for savings bank account in a government bank, where the minimum balance requirement is a lot lower. The balance requirement can vary from Rs.1,000 to Rs.10,000 in top city banks or private sector banks so; you need to consider meeting their standard balance requirement before opening a savings account in the bank.
- ATM: Recently, in a move to reduce free usage of ATMs for banking transactions, banks have started charging for using ATM beyond the permissible limit. Additionally, using other banks’ ATM for any transaction costs you more than using your own bank’s ATM. However, there are some banks that allow using ATMs for withdrawals or other transactions without any restriction on the number of times ATM is used. Some new banks, which do not have enough ATMs installed, waive off withdrawal fees for a specified number of added transactions.
- Net Banking: Free online banking is a facility that almost every bank offers today. The comfort of operating and making transactions at your will can be experienced through online banking facility. Before opening the account, verify if the bank offers user-friendly online services and upgrades its features to stay in competition with other players in the banking sector. Most of the technology competent banks have launched their banking apps in the market. You can download the easy-to-use app for the purpose of online banking and for easy payment of bills. You can even get your account linked to auto debts for investing in MFs or paying premiums. Having a tech savvy bank at your side can make banking quite effortless.
- Interest Rates: The rate at which a bank levies interest is an important aspect to consider while opening a fixed deposit or availing a loan. A number of banks provide high interest on savings account balances. Therefore, check interest rates offered by the bank before opening a savings account.
- Service charge: The amount charged for services and products differs depending on whether you open an account in a private or a public sector bank. It has been observed that while private sector banks provide exceptional services, they charge a higher service fee. On the other hand, public sector banks charge comparatively less fee, but their services may not be up to the mark all the time.
The right saving account will not only meet your requirement but also fulfill your criteria of choosing the bank. The popularity of the bank may not help in due course but the services and products offered surely will. Weigh all the aspects to make an informed decision about opening the account.