Savings Accounts may be abounding, but not all of them are suited to your needs. So, how do you zero-in on an account that is perfect for you when they all look the same? Let’s find out.
With a plethora of Savings Accounts available in the market, most of which look pretty much the same, it might be difficult for you to zero-in on an account that is best suited to your needs. So, how do you decide which Savings Account is the right one for you? We’ll take you through some of the considerations that you should bear in mind before choosing the best Savings Account for you.
While your needs and the Savings Account features may not be an exact match, you may want to start by considering some of the following points:
- Interest rates
- Minimum balance criteria
- Transactions or Service Charges
- Ease of online access
- Debit card offers
- ATM and branch density
1. Interest rates:
One of the foremost considerations that you should have for your Savings Bank account is the interest rate that it’s offering. When the RBI deregulated the interest rate regimen in 2011, it laid down that banks can set interest rates at their discretion. Banks offer a range of interest rates for their Savings Accounts and it can vary from 4% p.a. to 6.25% p.a. This is because interest rates are conditional.
For instance, a Savings Account balance below Rs. 50 lakhs may earn an interest of up to 3.50% p.a., whereas if you maintain a balance above Rs. 1 crore, your Savings Account may earn an interest of 6.25% p.a.
So, even if the interest rate looks tempting, you should check first if you will be able to satisfy the minimum balance criteria and other terms and conditions that it may come attached with. No doubt you’d want to park your funds in a high-interest Savings Account, but it should come with conditions that you will be able to meet.
Additional Reading: 7 Super Smart Savings Bank Account Options For Your Child
2. Minimum balance criteria:
Before opening the Savings Account, it’s important that you check if the account to be opened is a zero-balance account or there is a minimum amount of money that has to be maintained. Usually, the bank charges a fine on an account if the money deposited in the account falls below the minimum requirement. If you’re not sure whether you’ll be able to meet the minimum balance requirement, you could opt for a zero-balance account.
3. Transactions or service charges:
Before you open the account, comb through the terms and conditions carefully and find out if there are any fees or charges associated with the account. You can choose to ignore fees for features that you rarely use. Does the bank levy charges for making transfers to overseas bank accounts? Is there a cap on the number of free ATM withdrawals every month? Does the bank have a cap on the number of free online transactions?
The most common fee that banks charge is an administrative fee when your account balance falls below a certain amount. If you’re confident that you won’t be able to maintain the minimum balance, it’s better to opt for a bank that won’t charge you for that.
Additional Reading: Simple Ways Of Saving Money
4. Ease of online access:
Check if the bank offers good digital banking. In the current scenario, banking from home is the preferred choice, so you should be able to perform basic functions like checking your account balance, transferring funds, or open accounts like Fixed Deposits or PPF using your phone or computer.
5. Debit card offers:
Banks offer a host of freebies when you open a Savings Account as part of the joining kit – a free cheque book, supplementary cards, and discounts on groceries, dining or movie tickets if you shop with your Debit Card etc. Check if these freebies make sense for you. If you have little need for dining or grocery discounts, then it doesn’t matter if you’re getting these freebies or not.
Additional Reading: COVID-19 Lessons | How To Save Like A Pro
6. ATM and branch density:
Though going out to withdraw money amidst a pandemic will only be out of absolute necessity, it helps better to settle for a bank that has plenty of ATMs and branches across the city you’re residing in, because whenever you need cash, you shouldn’t have to travel too much to the nearest branch or ATM to withdraw cash or take care of urgent bank-related work.
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