Since the inception of the Digital India initiative almost a decade ago, Indians have increasingly relied on digital payments. However, a bank account is necessary to facilitate digital payments. As a result, by 2021, 78% of Indians had bank accounts. You too can now open your bank account hassle-free, both physically and digitally. But before that, you should know that there are different types of bank accounts serving a variety of purposes. If you want to build wealth gradually, consider opening a savings account. So without more ado, let’s dive into everything you need to know about opening a bank account.
What Is a Bank Account?
By definition, a bank account is a financial account that a bank maintains in your name. This account allows you to deposit and withdraw funds at your convenience. The reason people trust banks with their money is that banks keep money safe with multiple levels of security. Moreover, with a savings account at a bank, you can both save your money and watch it slowly grow. Apart from this, there are many more benefits to opening such an account.
Why Choose a Savings Account?
You should consider a savings account if you want to keep your money safely with the bank and earn interest at the same time. Some of these accounts even offer the facility to maintain a zero balance without penalties. This makes them one of the best accounts to keep your money safely while maintaining liquidity.
A also comes with an ATM card or a debit card, which allows you to withdraw cash or make digital transactions at different points of sale. The best part of these accounts is that they offer online banking facilities. This means you can register a Unified Payments Interface (UPI) ID linked to this account and seamlessly transact digitally through your smartphone.
Benefits of a Savings Account
Interest Earnings
One of the biggest benefits of these accounts is that the bank pays you interest as a percentage of your account balance. So the more money you keep in this account, the more interest you earn either quarterly, half-yearly, or annually.
Liquidity
A savings account also grants you the benefit of depositing and withdrawing funds whenever necessary. You can easily use an ATM card or even visit the bank in person.
Security
Since both nationalised and privatised banks are registered with the Reserve Bank of India, they are the safest places to store your money. In most cases, your savings are insured up to a certain limit.
Convenience
With an online savings account, you never need to physically visit the bank. You can check your account balance, pay bills, and transfer funds digitally through the bank’s mobile application.
How to Open a Bank Account?
With so many benefits of a savings account, you may be keen to open one. There are many ways to do this: Both physically in-person and online. Regardless of which mode you choose, here are some basic steps to opening any bank account.
1. Choose the Right Bank
The first step is to choose the right bank. Before deciding on which bank to open an account with, you can review the interest rates offered on savings accounts, account opening charges, and minimum balance requirements.
2. Select the Account Type
When opening a bank account, you get to choose the type of account. Depending on your needs, you can choose either a savings or a current account. While the former is suitable for everyone, the latter is better for working professionals and business owners.
3. Prepare the Required Documents
Once you have made up your mind, you need to gather all necessary documents. This includes your government photo identification (such as Aadhaar and Voter cards), your Permanent Account Number (PAN) card, etc.
4. Submit the Application
Finally, you need to submit your account opening application and wait for the bank to process your information. This usually takes just a couple of working days.
5. Initial Deposit
Once your bank account has been activated, you need to start with an initial deposit. The amount varies from bank to bank and also depends on the account type.
The Takeaway
By learning about the key benefits of savings accounts and understanding the entire process of opening a bank account, you are now one step closer to financial independence. Using this bank account, you can not only receive payments but also begin saving with the help of different instruments like fixed and recurring deposits.
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