Feature Rich Savings Bank Accounts

Gone are the days of plan vanilla savings bank accounts. Increasingly more banks are trying to offer a chain of graded savings bank products to various segments of customers. These banks belong to foreign, private and public – all three sectors. Choosing a bank for opening savings bank account has become difficult because of variations in the product.

There is one underlying principle in all these product offerings, however. The higher the average balance you maintain in your savings account, the more rewards are offered to you. These rewards usually come in the form of:

Average quarterly balance

Rewards / Benefits

As you commit more AQB e.g., a)      up to Rs 10,000 b)      above Rs 10,000 up to Rs 50,000 c)      above Rs 50,000 up to Rs 1,00,000 d)      above Rs 1,00,000 up to Rs 5 lakh e)      above Rs 5 lakh

ATM Card on day ‘one’ Low charge -> free ATM/ Debit Cards Free access to other banks’ ATMs without limits Low charge -> free outstation cheques collections Low charge -> free money remittances Free RTGS, NEFT facilities Free net banking, mobile banking, sms banking Free SMS alerts Free ‘anywhere banking’ Free utility bill payment electronically Payable at par, multicity  cheque book facility PAN/TAN facilitation service Free of cost demand drafts, pay orders up to a limit Free demat account opening Concessional rates for buying gold coins in the bank Free ‘overseas travel card’ Online equity trading facility Free personal accident insurance Providing health insurance cover at reasonable rates Temporary overdraft facility in case of need Pick up of cash / document at customer’s door (up to specified amount & times a day) Delivery of cash / document at customer’s door (up to specified amount & times a day), etc

The above is just indicative. The rewards/ benefits indicated are not precisely linked to the increasing quantum of AQB linked in the left hand side.

Interestingly, grading and differentiations of savings are being done by all categories of banks. Examples:

Indian Overseas Bank, a prime public sector bank has array of products graded like Silver I, Silver II, Gold I and Gold II with increasing order of AQB requirements and levels of customer benefits/ rewards;

Yes Bank, one of the most promising and upcoming private sector bank has a slew of savings products like Savings Value, Savings Advantage, Savings Select and Savings Exclusive. These are in increasing order in the value chain with Savings Exclusive being the top end variant.

Lesson

If you are a discerning and demanding customer, you have to do some amount of home work before you decide where to open your savings account and what sub-type of account to open. You would do well trying to link your requirements with what are on offer in the marketplace.

Internet banking and the best way to set a password

PASSWORD

How to create and manage? Here is a suggestion you may like

Normally, you require a userid and a password to access your account. Many banks permit you to use your customer id as the userid and use it along with a password. The first time when you use the password sent by your bank, you are prompted to change it at once and give a new password of your choice. In this connection you may note the following for your guidance:

(a) There may be some guidelines for framing your password. It is usual to insist upon a standard length e.g., minimum of eight and maximum of twelve characters. You may also be prompted to include in it (i) alphabet; (ii) numerals; and sometimes  (iii) a special character e.g., *;

(b) You must keep your password a close secret. Therefore noting it down in diaries etc is considered to be risky. The best thing for you is to create a password in accordance with a system that it is not simple for outsiders to guess but yet easy for you to recall whenever you need it. May be you would find the following interesting:

Remember a song or poem you like e.g., meri deshki dharti sona ugle (song from the film Uphaar) and a special year e.g., 2007 when you passed out from your university. Now take the first letters of the words in the song and individual numeral of the year and intersperse them. It will turn to be M1D0D0S7U. You can make it tougher by adding a special character e.g., * at an appropriate place. The result a 10 characters robust password that has four alphabets, four numerals and one special character all as its components.

This is only an example. You may use your own choice of song and your special year to create your own password that would defy others’ imagination but would be easy for you to remember;

(c) Some banks may give you a separate password for transferring money from your account. This is called transaction password. You may like to transfer money to other accounts in your name or to a third party. Like the first level password, at first the bank sends you a default transaction password. You need to create your own transaction password the first time you use that default password.

Internet-enabled savings bank accounts

INTERNET ENABLED SAVINGS BANK ACCOUNT

What are on offer?

If your bank allows you to access your savings account through its website, it is of course an added convenience. Nowadays, most banks offer this facility. Therefore you may like to know the scope of services that are offered by various banks and examine their adequacy in the light of your requirements.

 The common services offered are:

(a) Accessing and viewing your account;

(b) Take a printout of account statement / transactions relating to specified period;

© Making specific transaction oriented enquiries;

(d) Cheque status enquiries;

(e) Viewing of account details of all accounts with trhe bank;

Higher level of services may include:

(a) transferring money to fixed deposit;

(b) closing a fixed deposit and retransferring money into savings bank account;

© transferring money to make a demand draft;

(d) transferring money to a third party;

(e) investing in mutual fund;

(f) making periodical payments for utility services e.g., telephone bill;

(g) online tax payments;

And more..

Interest on Savings Bank Accounts

Interest on Savings Bank Account

Rate and periodicity

The periodicity of interest payment in savings account is usually half yearly. However, some banks pay interest at quarterly rests.

For long, banks in India used to pay uniform rate of interest in savings bank accounts. However since October last year, the RBI has permitted relaxations and allowed individual banks to fix up their rates subject to a couple of conditions:

(a) A bank has to have one single rate for all savings deposits up to Rs 1 lakh;

(b) A  bank can offer different rates for savings deposits above Rs 1 lakh, but it cannot discriminate between two or more such deposits in terms of rate of interest if made on the same date at any of its offices;

This has already made some impact and you may be interested to know if any bank has begun to offer more for savings deposit?

Most of the banks presently offer 3.5% p.a. for savings deposits. However you must have observed spells of advertising by a couple of banks that they are paying much more.

Kotak Mahindra Bank is presently offering 5.5% p.a. on all savings deposit with balance up to Rs 1 lakh and 6 % p.a. for those with balance above Rs 1 lakh;

Yes Bank presently offers 6% on all savings deposit with balance up to Rs 1 lakh and at 7% p.a. for those with balance beyond Rs 1 lakh;

If you maintain heavy balance in your savings bank account, you may be keen about the rates of interest offered by various banks.

TDS on interest paid on savings bank accounts

Banks do not deduct any TDS on interest paid to savings bank accounts.