Types of Savings Accounts in India: Which one is right for you?

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Saving for the future is the most essential financial habit everyone should form, regardless of age. You might wonder why you open a separate account for saving funds when you can simply use a regular one and discipline yourself. Creating financial stringency is difficult and takes years to form a habit.

Online Saving Account opening brings you closer to being financially disciplined and keeping your money out of sight. Ultimately, you save enough money in a separate account and control your urge to shop unnecessarily. There are different types of accounts banks offer in India, such as:

Zero-Balance Accounts

Also known as the Basic Savings Bank Deposit, this is ideal for anyone who wants to opt for a model that works more like a regular account but does not want to go through the hassles of maintaining a minimal balance. There are no restrictions on age or income. There is also no limit to the number or the value of deposits you can make monthly in your BSBD Account.

Regular Savings Accounts

This Savings Account is perfect if you focus on increasing your interest earnings and achieving your short-term financial goals. You need to submit an initial deposit amount and maintain a minimum balance. Since banks offer different interest rates, checking them before account opening is wiser. There are limitations to the monthly transactions and withdrawals you can make, followed by penalties.

Women’s Savings Accounts

This account is perfect if you aim to open an individual or joint Savings Account to earn interest. You need to save a minimum amount of at least Rs. 5,000 or Rs. 10,000 monthly to get benefits like lower processing fees, cashback offers, Online Banking services, chequebook delivery, and other doorstep banking facilities.

Senior Citizens’ Savings Accounts

The Indian government has offered a Senior Citizens’ Savings Scheme, which helps the elderly in retirement savings while receiving quarterly interest. Indian residents above 60 can open this account and get the endless benefits of long-term financial security with attractive features on the Banking app. These include tax benefits, premature withdrawals, adding nominations, and long maturity periods.

Salary Accounts

Only employers can open this Bank Account for their employees. They tie up with certain banks to open them so that they can credit the monthly salaries to the account. By default, it does not hold a minimum balance requirement. If the account does not receive salary credits for more than three months, it gets converted to a Regular Account with a minimum balance.

Moreover, you can earn higher interest on your idle balance in the account, which gets compounded over time. Most people open this account to satisfy their short-term goals as it is flexible. You learn to become financially literate by monitoring your expenses and using tools like interest calculators to determine your overall principal and interest savings.