Types of Savings Accounts

Explore different types of savings accounts.
Savings Accounts
3-June-2024
16 July 2024

In today's uncertain economic environment, saving money is crucial for building a secure financial future. With a variety of saving account options available in India, navigating them can be confusing. This guide explores the different types of savings accounts offered by banks in India, helping you choose the one that best suits your needs.

Pro tip

Enjoy higher interest rate with Bajaj Finance Digital FD. Unlock returns of up to 8.65% p.a. by investing for 42 months via website and app.

Types of savings accounts in India

Here is a breakdown of the most common savings accounts offered by Indian banks:

1. Regular saving account:

This is the most basic and widely available savings account. It offers:

  • Easy access: You can access this money anytime through ATMs, a debit card, or online transactions.
  • Minimum balance requirement: Most banks require you to maintain a minimum balance in your account, failing which, a penalty might be charged.
  • Lower interest rates: Compared to other savings accounts, regular savings accounts typically offer lower interest rate.

2. Salary account:

This account is specifically designed for salaried individuals. Many companies partner with banks to offer salary accounts to their employees. Benefits may include:

  • No minimum balance requirement: In many cases, salary accounts waive the minimum balance requirement.
  • Special benefits: Some banks offer salary account holders additional perks like free debit cards, discounts on bank products, or higher interest rates on their saving balance.

To further grow the money in your salary account, consider opening a fixed deposit (FD) with a portion of your savings. FD offer guaranteed returns and can be a great way to set aside funds for specific goals or create a financial safety net.

3. Senior citizen savings account:

This account caters to the needs of senior citizens (usually above 60 years of age). It often offes:

  • Higher interest rates: Compared to regular saving accounts, senior citizen accounts typically offer higher intere.
  • Minimum balance requirements: Some banks may have lower minimum balance requirements or waive them entirely for senior citizens.
  • Additional benefits: Some banks may offer additional benefits like discounts on bank charges, medical insurance plans, or accidental death coverage.

4. Women's saving account:

These accounts are designed to empower women by offering:

  • Attractive interest rates: Similar to senior citizen account, women's savings account may offer higher interest rates compared to regular saving account.
  • Lower minimum balance requirement: Some banks may offer lower minimum balance requirements or waive them entirely for women saving account.
  • Special features: Some banks might offer additional features like free ATM withdrawals, discounts on loans, or financial literacy workshops.

5. Kid’s saving account:

These accounts are meant to inculcate a savings habit in children. They may offer:

  • Attractive features: Banks may design kids accounts with fun features like cartoon characters, colorful passbooks, or small gifts to encourage saving.
  • Lower minimum balance requirements: Minimum balance requirements might be lower for kid’s account or waived entirely.
  • Guardianship: Parents or guardians typically manage these accounts until the child reaches adulthood.

6. Zero balance saving account:

These accounts eliminate the minimum balance requirement, making them ideal for those who maintain a low balance or have fluctuating income. However, they may offer:

  • Limited features: Zero balance accounts might have limited features like fewer free ATM withdrawals or transactions compared to regular savings accounts.
  • Lower interest rates: The interest rates offered on zero balance accounts might be lower than those offered on regular savings accounts.

Also read: Smart Investment Options

Maximising your savings strategy

Here are some tips to get the most out of your savings accounts:

  • Compare different banks: Research and compare the features, interest rates, and fees offered by different banks before opening an account.
  • Maintain a minimum balance: If you opt for an account with a minimum balance requirement, ensure you maintain it to avoid penalties.
  • Automate your savings: Set up a standing order to automatically transfer a fixed amount from your salary account to your savings account every month. This helps build a consistent savings habit.
  • Set financial goals: Having clear goals like saving for a down payment, a vacation, or retirement can motivate you to save more effectively. Choose saving account that align with your goals.

Beyond saving account: Exploring other investment options

While savings accounts offer a safe place to park your money and earn some interest, they may not always provide the highest returns. As your financial goals shift and your risk tolerance allows, consider exploring other investment options like:

  • Fixed Deposits (FDs): FD offer guaranteed returns for a fixed period, typically at a higher interest rate than savings accounts. However, you cannot access your money before the maturity date without penalty.
  • Mutual funds: These allow you to invest in a diversified basket of stocks or bonds, potentially offering higher returns than savings accounts, but also carrying a degree of risk.
  • Stocks: Investing directly in stocks allows for potentially higher returns, but also carries a significant amount of risk. This option requires careful research and investment knowledge.

Also read: Investment meaning

Conclusion

Understanding the different types of savings accounts helps you to make informed decisions about where to keep your money. By choosing the right account based on your needs, maximising your savings strategy, and potentially exploring other investment options, you can build a secure financial future and achieve your financial goals. Don't hesitate to consult with a financial advisor for personalised guidance on creating a savings and investment plan tailored to your unique circumstances.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Systematic Investment Plan Calculator

Fixed Deposit Interest Calculator

Systematic Deposit Calculator

Gratuity Calculator

Mutual Fund Calculator

Lumpsum Calculator

Recurring Deposit Calculator

Sukanya Samriddhi Yojana Calculator

PPF Calculator

 

Employee Provident Fund Calculator

Frequently asked questions

Which is better, a current or savings account?

Savings accounts are designed for accumulating funds and earning interest, while current accounts cater to frequent transactions and business needs.

How do you define a savings account?

A savings account is a basic bank account primarily meant for storing money. It allows limited transactions but offers interest on the deposited amount, promoting regular savings.

Which type of savings account is best?

The best savings account depends on your financial goals and banking habits. High-yield savings accounts offer better interest rates, while others might offer features like zero-balance maintenance or rewards programs.

What are the advantages of a savings account?

Savings accounts offer several advantages, including the security of your money, interest earnings, easy access to funds, and various online/mobile banking facilities.

Show More Show Less

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.