What is a Savings bank account?
A savings bank account is an interest-bearing deposit account that can be opened by an individual with the bank and financial institute. It is suitable for parking short-term money for day-to-day uses. Indian Banks such as State Bank of India, ICICI bank, HDFC bank ltd and other PSUs bank are offering the facility.
It is a convenient way of dealing with your money as it would give you a modest rate of interest. Normally in our country, the rates go between 2 to 5 % per annum which are paid monthly or quarterly to the account.

A savings bank account can be opened by any individual irrespective of age. It’s reliable and safe besides giving you a decent interest rate. For parking short-term fund SB account is the best. It would serve you all the requirements of normal transactions.
With your savings bank account, you would be able to pay daily household payments such as utility bills, grocery purchases, gas refills etc.
The benefits that you get from having it are many. These include the facilities of ATM cards, internet banking, cheque book, SMS alerts, phone banking, doorstep banking etc. but all these facilities come with a cost. ATM has an annual maintenance charge which depends on the type of card which again varies amongst the banks.
Along with its benefits, a savings bank account has its own limitations. Such as there is a limited number of transactions you can do per month. Not all SB accounts are the same. Only 4 to 5 monthly transactions can be done with the Tiny account which is basically a zero balance account for the low-income group. The maximum amount is capped at ₹2 to ₹5 lacs which you can maintain for a year. Likewise, salary package accounts are loaded with benefits. Normal savings bank account charges normal fees for various purposes such as ATM AMC, SMS charges, transaction charges, cash handling charges, cheque issuance charges etc.
Knowing its pros and cons one has to think before owning a Savings Bank account. As far as it is concerned, banks such as SBI, ICICI, and HDFC are offering good deals under this product.
Here, we have prepared a few points which would help you while deciding which bank to go for.
Choose the Bank
Choosing the right Bank would give you satisfaction later on. There are a number of banks that are doing exceedingly well in the market and choosing between these banks might be tricky too.
The brand name is one such thing that people normally considered while choosing. Deciding just by brand name would be a mistake. There are other factors which need to be considered too.
It might be worth considering the following factors while choosing Bank to open a savings bank account. These are
- Rate of interest.
- Monthly average balance or Quarterly average balance.
- Net banking facility.
- Availability of chequebook, ATM card, SMS alert, telebanking.
- Transaction limits.
- Various charges and AMCs bank is going to levy on you.
Find out the rate of interest
You have got to know what Bank is offering you. As you are going to keep your fund in this bank, it’s necessary to know well in advance what you going to get in return.
Savings bank account rates are different for different banks. State bank of India, offers 2.7%. Likewise, ICICI and HDFC banks are offering the range of 3% to 3.5% per annum.
See the trend of interest rates bank offers and decide accordingly while choosing the best one. Normally stable bank has low rates while banks that need your deposit might give you higher SB rates. So, basically, you are safer if you go for banks which is stable.
Decide whether it’s a single or joint account
A savings bank account can be opened in ways that can be operated by multiple persons or you can just open it in your single name. Decide whichever you would want to open an account with. For instance, you might like to open a savings bank account along with your spouse or with your son/daughter, and whoever you might think of, it can be arranged accordingly.
Account operation is another area that you would require to consider. In a single account, it’s of course only you. So you will be operating this account. Else in a joint account, you can choose the mode of operation.
You can mandate the following mode of operations in your joint account.
- Either or Survivor
- Former or Survivor.
- Jointly
- Specific mandate stating who will operate the account.
- By executing power of attorney.
Keep ready KYC documents
To open an account in the bank, you may need a few documents to recheck. These will serve the identification purposes. Make sure that your name, date of birth and address is proper on your ID card.
Banks normally see the following documents to establish proper KYC for onboarding fresh customers. You may refer to the list
- Aadhaar card
- Voter Card
- Driver’s license
- Passport
In addition to PAN or Form 60/61.
Keep these documents ready so that while processing your savings bank account no issues arise.
Latest photograph
Keep ready your latest photograph preferably 2/3 copies. While filling out the form you have to paste it properly.
What benefit you are getting?
There are a number of services bank usually gives at no cost. Try to learn about those facilities as much as you can.
We can give you some ideas. Look for the following details before you finalize. Such as,
- Is an ATM card facility available and what are its charges and AMC? What transaction limit you are going to get with your ATM?
- Is internet banking available? Almost all banks give access to internet banking at no cost. Know about the transaction limit you are getting. Various discounted rates are set for internet banking users. By the way, do you know transactions over internet banking are cheaper than doing it by visiting the bank? It’s for both banks as well as for the user.
- Know about the number of cheques leaves free per year. Beyond that bank normally charges you. Rates may be in the range of ₹3 to ₹10 per cheque leaves.
- See for account keeping a charge. A bank such as the State Bank of India, do not charge account-keeping charge on a savings Bank account. But you may find few other private banks may charge you besides service tax charges.
Accessibility
The Bank where you maintain your account should be accessible at your ease. This is a very important aspect when choosing your favourite bank. If your bank is not accessible during working hours, you will face lots of issues later on. There are certain banks where their penetration level is quite low. These banks are available only in metro cities. Whereas banks such as SBI, ICICI and HDFC are people’s favoured banks as these banks are found in every nook and corner of the country.
The indication points are mentioned below in the chart. The list is just indicative data as these figures keep on changing from time to time. For that please refer bank’s official website.
Bank | Rate of interest | Net banking | Cheque book & ATM card | MAB(Minimum average monthly balance) |
---|---|---|---|---|
State Bank of India | 2.7% | Yes | Yes | Nil |
ICICI | 3 % | Yes | Yes | ₹ Nil/1000/2500/5000/10000 |
HDFC | 3-3.50% | Yes | Yes | ₹ 2500/5000/10000/25000 |
Kotak Mahindra Bank | 3.50% | Yes | Yes | ₹ 2000/5000/10000/20000 |
Axis bank | 3-3.50% | Yes | Yes | ₹ Nil/10000/25000/100000 |
RBL Bank | 4.25-6% | Yes | Yes | ₹ Nil/500/1000/2500 |
IndusInd Bank | 4-5% | Yes | Yes | ₹ Nil/10000/25000/250000 |