A savings account, for most people, becomes the primary mode of transaction with a bank or financial institution. It serves as a way to keep extra money safe, while allowing you to gradually build the nest egg for loved ones. Although this particular account is very important in any investment portfolio, people usually don’t do much research on it. But you wouldn’t make the same mistake, would you? So, take a look at the things to consider when opening your savings account.
Interest rate
Savings accounts tend to offer lower interest rates than other investment options. After all, they are mainly chosen for their security features and not for high interest rates. For big banks like Axis Bank, you can expect a standard rate of savings account interest which is set at 3 to 4 percent. Some financial institutions may offer a rate of 6% or more, but other factors must also be considered in this case.
Minimum Average Balance Guideline
The average minimum balance requirement refers to the average of all closing balances to be had in an account during a month. This requirement varies from bank to bank. In most cases, public sector banks have zero to INR 2,000 as the average minimum balance requirement. Private banks, on the other hand, have kept this limit between INR 5,000 and INR 10,000. Then there is Axis Bank which allows you to open a base savings account for a minimum balance.
Availability of 24/7 banking service
Nowadays, you can maintain and open a bank account online. You can do all the transactions online which means you have the banking facility anytime and anywhere. You just need to download the banking application on your mobile and that’s it.
The bank branch network
Although most people like to perform different transactions through credit or debit cards, mobile banking, internet banking or UPI, there are some procedures that cannot be done online. You might need to visit the branch for some reason. Thus, it is useful to choose a bank that has a wider network of branches in your area.
Availability of credit facilities
It’s always easier to take out loans from the bank that holds your basic savings account. When banks give you loans, they consider your banking history with them. A satisfactory and lasting banking relationship is a major asset when it comes to taking out a loan.
In addition, banks are now offering pre-qualified and pre-approved loans to account holders with good credit history and account balances. You can apply for the loan online and without paperwork to get the money in your account instantly. So, if there is a chance that you will need credit in the future, look at the credit facilities offered by the bank.
Offers and discounts offered by the bank
Who doesn’t want to pay bills easily and shop cashless? Who wouldn’t want lucrative offers and discounts on their debit cards? Major banks offer amazing offers and discounts from time to time. For example, you can get a flat ten to fifteen percent discount on Flipkart for six months. Plus, there’s up to 45% cashback on over thirty brands every time you shop.
Charges and fees you must pay
Although the banks provide you with interest for investing the funds with them, you are also charged for their services. Typically, banks charge certain service fees when you use an out-of-network ATM more than a certain number of times.
There are additional fees for transactional SMS, deposit fees, cash withdrawal, getting more checks than the set limit, etc. There are also annual fees for lockers, credit cards, debit cards, etc. You will get the full fee schedule right after opening the account. Note that for the digital savings account, during the VKYC procedure, you do not need to upload any documents. All you have to do is show your original PAN card and the agent will take a screenshot of the same.
Other banking facilities, services and products
In most cases, a savings account slowly opens the doors to several other banking products, such as mutual funds, lockers, insurance, loans, recurring deposits, term deposits, etc. So, in addition to focusing on the benefits and features of a savings account, it is also important to look into other banking products offered by the bank.
Customer service offered
You keep your hard-earned money in a bank based solely on trust. When you have a problem or need help with anything, branch staff and customer service should be helpful and prompt. A bank that offers an amazing product line and poor customer service is definitely not the right choice.
A savings account that ticks all the boxes mentioned above is the one you should choose. After all, when it comes to making a good investment, there is no room for compromise.
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