A Savings Account is the most basic account you can open at a bank. Such an account is an essential instrument to add to your financial mix. It offers a safe way to save funds and lets you earn interest simultaneously. It is also relatively liquid. Consequently, you can easily withdraw funds from this account whenever needed. However, if you have questions about this account, you are not alone.
Here are some frequently asked questions about a Savings Account that will help you understand this financial product better.
Why do you need a Savings Account?
A Savings Account acts as a virtual vault that lets you keep your money safely. As a result, you can protect your money from loss or theft. Besides this, the account is helpful for the following reasons:
- It ensures liquidity so that you can access your funds whenever required.
- The funds in your account earn interest at competitive Savings Account interest rates. This enables you to grow money over time.
- You can use it to save for emergencies and other significant expenses.
- You can utilise this account to send and receive payments, make investments, pay utility bills, etc.
- What does the minimum balance requirement mean?
Savings Accounts of many banks have a minimum balance requirement. This is the lowest amount you should maintain in your account. If you fail to maintain this, the bank might levy a penalty. Hence, checking this factor and ensuring you are comfortable with it is essential.
How do you determine the balance of your Savings Account?
Today, you can easily check the balance in your account from anywhere and anytime using the Online Banking platforms your bank offers. You can also determine your balance by reviewing your account statements, visiting an ATM, using SMS Banking, etc.
Do you require a PAN card to open your account?
As per guidelines, providing your PAN card when opening a Savings Account is mandatory. However, if you do not have it, you need to submit Form 60, mentioning the reason for not possessing a PAN.
How is the interest in a Savings Account calculated?
The interest on a Savings Account is computed daily. It depends on the closing balance of your account daily. The formula used to determine the interest is:
Interest per month = (Daily closing balance * Interest rate* Number of days) / Number of days in the year
When is the interest credited in your Savings Account?
The interest is credited to your account monthly, quarterly, annually, etc.
Can you open more than one account?
Yes, you can open more than one Savings Account. In addition, opening an account is convenient now. You can easily open one online by downloading the Banking app. On the other hand, you can also visit their website to complete the process.
