RBI’s continuous efforts for a better financial inclusion has totally transformed the banking system in India. Now, banks are competing with each other to attract more customers, therefore, they are trying to enhance the service quality and also offering a better return to its customers to woo them. Banks are now trying to reach more number of customers by providing services customized to their needs. The modern banking tools have revolutionized the service quality for the customers. Debit cards, online banking and mobile banking have provided all necessary flexibility solicited by the customers.
Analyze Your Saving Bank Account
When we talk about a saving bank account, interest, associated charges, service quality and associated facilities are some significant factors that determine the selection criteria of a savings account by customers. Let’s check some important factors to analyze how much your saving bank account suits to your requirements.
Interest rate factor
In the year 2011, RBI liberated the banks to decide their own savings account interest rate depending on liquidity and profit requirement. Thereafter, banks started setting their own interest rates for the savings account. Now, the savings account interest rate varies from bank to bank. Most of the PSU banks are offering an interest rate of 4% over savings account whereas some private banks allow a higher rate of interest close to 7% pa. The interest is normally calculated on the daily balance. The savings account interest rate in the prevailing market for a few banks is as follows:
Interest Rate (Per Annum)
5.5% to 6%
5.5% to 6%
6% to 7%
Note: Data taken from the respective bank’s website
The interest rate can make a lot of difference if you intend to hold a large amount in a savings account regularly. But, the interest rate should not be the sole criteria to opt a saving account.
It is very important to check the charges before opening a savings account in any bank. Nowadays, banks have various varieties available in the savings account, ranging from no frills account with minimum facilities to a premium account with all sorts of facilities. Most of the banks have minimum balance criteria associated with savings account, which ranges from zero balance in rural areas to Rs 10,000 in a metropolitan. The debit card received with a savings account is also charged on the basis of type of account you have actually opted for. Even the printed account statements taken on request from the banks are charged as per its norms. The recent circular by RBI has allowed banks to charge you for the SMS sent for all the debits and credits. Therefore, you must assess all the associated charges before opting for a savings bank account. Ignoring the charges can prove to be very costly as a penalty clause of banks are very stringent.
Service quality and facilities:
You must check the service quality of banks at your local level before opening a savings account. The bank should have a good lending record, number of ATM at local level should be good and there should be adequate staff support. It has been noted that some banks have bad network connectivity due to which most of the time the link is down, therefore, you may suffer from such service standard. If you have plan to borrow in future, then again the service quality of banks should be good otherwise your application would be delayed unnecessarily or it will get rejected for no reason.
Apart from above mentioned discussion, another important point is that interest earned from a savings bank account for an amount up to Rs 10,000 p.a is tax free as per Sec 80TTA of IT act. So don’t forget to claim such deduction while filing an IT return. Facilities like auto sweep for better interest return and auto debit facilities for investment & insurance products provide great flexibility to the account holders. Most of the people learn the first things related to banking while opening ‘savings bank account’. Now you can also open a bank account in a few hours with most of the banks by simply filling an online application form and submitting a printout to designated bank branch with all the id proofs; simple isn’t it!