Saving Account

Savings Bank accounts are opened mainly for saving purpose and not for the business purpose, and therefore, such accounts cannot be opened in the name of any business concerns whether

proprietary/partnership/company or association.

INTRODUCTION:-

EligibilityThe following types of customers are eligible to open an ordinary saving bank account :-

Eligibility

Individuals

Two or more

individual

Minors

Illiterate and blind

person

Hindu undivided

family

Clubs, Associatio

n, Committee

s, Societies, Schools,

etc.

Trusts

Executors and

Administrators

Types of Account Holders:-• Single/Individual :-A single person can open a account with his or her own name.• Joint Holders:-A joint account is an account in the name of two or more person.

• Either (or) Survivor:- the most common form of joint account, only two individual can operate the account i.e. primary and secondary account holder.

• Anyone (or) Survivor:- this is similar to “either or survivor” option. The only difference is, more than two individual can operate the account.

• Former (or) Survivor:- in this account only primary account holder can access an operate the account till the time he/she is alive. The secondary account holder can operate the account only after the death of primary account holder.

• Latter (or) Survivor:- in this account secondary account holder can access an operate the account till the time he/she is alive. The primary account holder can operate the account only after the death of secondary account holder.

• Jointly:- In this type of account, all the transaction need to be signed and mandated by all the account holders. If any of the account holder dies then the account cannot be further operated.

• Jointly (or) Survivor:- It is same as jointly option but the difference is, the survivor can continue to operate the account.

• Minors:- Minor below 18 years old can open an account jointly with parent/guardian. For e.g.:- SBI [pehla kadam (any age below 18) and Pehli Udaan (above the age 10)]

• HUF( Hindu Undivided Family)

Interest Rate• The rate of interest in saving bank account was 4% p.a as mandated by

the government in may 2011.• However the interest rate on a saving bank deposits liberalized, so each

bank can decide its own rate of interest.• Presently, majority of the banks give 4% to 6% interest on the balance in

the account.• Banks now use this as a competing factor and weave it into their merits

to enhance their customer.

CASE STUDY:-• Mr. Sachin had a balance of 50000 in his account as on

January 10th. On January 20th, he received 100000 as maturity bonus for his LIC policy. On 28th January he had withdrawn 1250000 for making a down payment for his new flat, thereby reducing his account balance to 25000. In his case, the bank would consider 25000 for interest calculation, as it is lowest amount available in his account between 10th and 28th January. So , the interest amount Sachin is eligible for the month of February will be for 25000 @ 4% p.a. which amounts to 83.33

Minimum Balance Requirement • Banks require a certain minimum balance to be maintained in

saving account. Some bank insist on a minimum balance at all times, and others insist on a AVERAGE MINIMUM BALANCE (AMB) during a period of three months generally known as the AVERAGE QUARTERLY BALANCE (AQB).

• Banks offer a variety of SB account keeping in mind the specific needs of customer and their capacity to maintain the AMB and AQB.

• Banks charge the penalty if the AMB and AQB is not maintained in the account. This aspect should be discussed with the customer and transparently disclosed at the time of account opening in order to avoid disputes at a later date.

In the different banks the AMB is as follow as:-Banks Basin

catholic co-op bank

Bank of India ICICI Standard Chartered

Interest rate 4% 4% 4% 4%

AMB 500 500 10000 25000

Penalty 25 30 350+service tax depend on amount

maintained

AMB of saving account and premium account

Normal Silver Gold Platinum0.0020,000.0040,000.0060,000.0080,000.00

100,000.00120,000.00

AMB ICICI BANK

AMB ICICI BANK

• Depositor can withdraw up to 50,000 for the normal, silver and gold account.• Whereas the depositor with platinum account can withdraw cash up to 200,000

from ATM.

Premium AccountsBanks provide special/premium account for the special customer who has the capacity to maintain AMB more than 50,000 to 1,00,000. This account holder get extra services. The premium accounts are as follow:- a. Silver Account,

b. Gold Account,c. Platinum Account.

10,00025,000

50,000

1,00,000

₹₹

₹

₹

Saving account for NRIs and Returned NRIs :-NRO Account NRE Account RFC Account

FULL FORM Non- Resident Ordinary Account

Non- Resident External Account

Resident Foreign Currency Account

ACCOUNT HOLDER NRI NRI RETURNED NRIDENOMINATED IN Rupee Account (Rupees) Rupee Account (Rupees) (US dollar, pound sterling,

EURO )PURPOSE Generally opened by

NRIs who earn income in India.eg.:- 1. rental from their real estate property.2. Pension, etc

This accounts are operated by the NRIs who earn income abroad.eg.:- salary

Generally operated by NRIs who returning back permanently in India. To park overseas income as foreign currency in India, without converting it into rupees.eg.:- sale of Eligible Assets outside India.

Types of Account Saving account, current account and term deposit.

Saving account, current account and term deposit.

Saving account and fixed term deposit.

Repatriation Only for interest not principle

Both Both

Exchange Risk Yes Yes No

‘No-frills’ Accounts:-• To achieve the objective of greater financial inclusion, all

banks have been advised by the RBI to make available a basic banking ‘no-frills’ savings bank account either with ‘nil’ or very low minimum balance.

• A Revolutionary Financial Inclusion Program:- Prime Minister Jan Dhan Yojna (PMJDY).

24.98 Crore Accounts opened so far

44,221.27 Crore deposits.

Facilities available with a Savings bank account• Cash deposit and withdrawal • Clearing of cheques• Anywhere banking facility• Debit card• ATM facility• Internet banking• Mobile banking• Remittance facility such as

• Fund transfer • Demand draft

• Tax collection

Documents required for opening saving bank account.

• Print out the Account Opening Form (AOF)• Proof of identity and address (Passport, Voter's ID, Driving

Licenses, Aadhar card, NREGA card, PAN card)• 2 recent passport-size coloured photographs.• In the case of minors below the age of 10, ID proof of the

person who will operate the account is required.

Conclusion• Savings bank account are meant to promote the habit of

saving among the citizens while allowing them to use their funds when required.

• The main advantage of saving account is its high liquidity and safety.

• On the top of that saving bank account earn moderate interest rate too.

• Saving account made easy for account holder to travel cashless as he has option to withdraw cash from any branch of same bank or any ATM.

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