The Savings Bank Account is generally opened in bank by salaried persons or by the persons who have a fixed regular income. This facility is also given to students, senior citizens, pensioners, and so on.
Savings bank accounts are opened to encourage the people to save money and collect their savings. The savings bank account holder is allowed to withdraw money from the account as and when required. The interest which is given on savings bank accounts is sometime attractive, but often nominal.
Savings bank account offers the following important features:-
1] No Age Restriction –
There is no age restriction for opening a savings bank account. Minors can also open an account with the natural guardian operating it. Minors above 10 years of age can operate the account on their own.
2] Easy Account Maintenance & Low Charges –
Maintaining a savings bank account is very easy. It is hassle free and the process of maintaining and using it is also not complex. Maintaining the records of transactions made from the account is very simple. Transaction records are maintained through passbooks, either a physical one or an e-passbook.
The minimum balance (average monthly balance) required to maintain in the account depends on account location, which could be urban, semi-urban or rural. Banks charge penalty if this amount goes below the minimum amount of balance to be maintained. Minimum amount varies bank to bank. Minimum balance required also depends on account type such as no-frills, savings, salary-linked, deposit-linked. A pre-defined number of transactions (or withdrawals) per month are free. After the number of free transactions is over, banks charge fees.
Example – Below you can see the various charges levied by SBI for account maintenance.
3] Good Interest Rates –
At present, the rate of interest ranges between 3.5% to 4% per annum for amount up to Rs. 1 lakh in India. The interest rates vary as per the amount of money deposited in the savings bank account. It is also subject to current trend of banking policies in a country. The interest is calculated on the daily-balance in the account.
Given below are Interest Rates of Savings Account of Major Banks August 2018.
4] No Account Tenure Restriction –
Savings bank account is of continuing nature. There is no maximum period of holding. The tenure of a savings bank account is as long as the account is active. There is no maximum duration for holding money in a savings bank account.
5] Nomination Facility Available –
Savings bank account provides with nomination facility. Nomination is a facility that enables deposit account holders to nominate an individual, who can claim the proceeds of the deposit accounts or contents of the safe deposit lockers, post the death of the original depositors.
There can be only one nominee per account. But, different accounts can be nominated in favour of different individuals.
6] Easy Exit Option –
A person can close the account whenever he/she wishes to do so. He can close the account on any day within banking hours. There are no restrictions for closing your savings bank account. Also, exiting a savings bank account doe not attract any kind of charges or penalties.