The roots of banking may have germinated on lending soil, but as far as society can think about it, a bank is like a custodian to keep our money safe. Hence, a savings account is the most effective and safe product offered by any bank.
The function of a savings account is self-explanatory. You open a savings account with a bank and deposit your earnings in that account. The bank in return, offers interest on the available amount on a yearly basis and as per their current interest rate.
The rate of interest offered by banks may vary, but the safety net is that your principal amount is always safe. This is a reason why savings accounts are considered the most basic and reliable form of investment. The foundation laid by a savings account helps us to save our income and gradually grow our money.
There are numerous public and private sector banks in India, offering savings accounts. Savings is just one feature pertaining to a savings account. A savings account is also useful to carry out daily banking activities like transferring funds, receiving money, cheque deposit, online or offline purchases, paying bills, debit card transactions, etc.
Savings account interest rate
The rate of interest is different for every Bank, but it typically ranges from 2.50% to 4.50%. Usually, interest is calculated on a daily basis and credited to your account at the end of a quarter. The interest earned is directly related to the balance maintained in your account. So, it is a good idea to save more in order to accrue a bigger interest rate at the end of a financial year.
Online savings account
The way we live is changing gears and gliding through the waves of digitization; now our requirements and remedies are always a couple of taps away. In such circumstances, banks just don’t have the liberty to follow the past decades manifesto. So, they evolved and we are presented with features like online savings accounts, virtual debit cards, zero balance accounts and there are more features in the pipeline.
Let us take a sip of what online savings accounts are and why every bank wants you to have one in your kitty. If you have a smart phone or a device with an internet connection, you are ready to open an account online.
But why should you get one?
An online savings account is a paperless experience and you can get one in just minutes. If this is not good enough, don’t worry, there is more. Most banks, both traditional and neo banks offer such an account at zero monthly maintenance charges, they usually call it a zero balance account. The gain here is that you are not bound to keep a certain amount in your savings account at all times and are free to spend the money in your savings account as per your wish. A point to remember: the more you save the more you earn.
Kotak811 is offering a per annum interest rate of 3.50% p.a. on the money parked in a Digital Savings Bank Account. There are other features as well:
Free virtual debit card, Video KYC which allows you to validated your account from the comfort of your home, a lifetime free credit card (subject to bank discretion), investment options such as FD / RD, free and fast digital money transfer, special ecommerce offers, all of this and more through the mobile banking App.
This can be tagged as the most convenient way of banking, since you don’t have to juggle between apps to deal with money matters.
Since we are talking about interest rates, there is another offering from Kotak Mahindra Bank called ActivMoney or Flexi Fixed Deposit. Under this scheme, surplus money over a specific threshold is transferred from a savings account to a Fixed Deposit and vice versa.
The transferred money could be routed back to the savings account whenever required. This allows you to earn FD interest on part of the balance lying idle and enjoy liquidity in your savings account.
How to open online savings account?
Opening an online savings account in 2022 is a cakewalk. All you need is your PAN and Aadhaar#. Download the app or visit the bank’s website, key in some details and your account will be processed. Post-account opening you can schedule a Video KYC verification from the comfort of your home or office. A bank official will contact you as per the scheduled time and help you with the KYC verification. Once the KYC verification is done, your account will be active and ready for transactions.
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This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empanelled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees, and contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.
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