Along with making prudent investment decisions that help you grow your wealth, it is equally important to have ample liquidity. Cash withdrawal from investments with a lock-in period can attract penalties and deductions, leaving you in the lurch. So how can you be prepared during a financial crisis or an emergency with enough liquid cash?
Well, by having a savings account in a bank where you can put the money that not only earns interest but is also accessible to you at all times. Let us take a look at how you can open a savings account and utilize its advantages for your good.
Steps to savings account opening for a beginner
Before going to the bank to open a savings account, you need to put together a few necessary documents that need to be affixed along with the application form. These include:
- 2 passport size recent photographs
- Address proof such as Voter ID passport, Driving Licence, etc
- Copy of Aadhar card
- Copy of PAN card
If you do not have a PAN card, you will be asked to fill Form 60 or 61. However, in this case, the bank will not allow you to deposit an amount higher than Rs. 50,000 in your account. Also, the interest that is accumulated on the money in your savings account will attract a higher tax.
2. Introduction by a reference:
Nationalized banks require a reference from an existing customer for you to open a savings account with them. If you know someone who has an operational savings account, you can request him or her to introduce you formally to the bank. You can also request the bank manager to help you with this. Most private banks have done away with this procedure and you can easily approach them to open a savings account even without any reference. If you are below 18 years of age, a parent or guardian’s help is required for account opening.
3. Keep the opening amount ready:
Each bank has a minimum balance amount that is mandatory to open a savings account with them. Nationalized banks may require you to deposit Rs. 500 to Rs. 1,000 while the amount may be higher for private banks. You have the option to do so either by cash or cheque.
4. Going to the bank:
Approach the bank executive and enquire about the benefits of a savings account that you wish to open. Once you are ready, you will be given an application form to fill up. You can then submit the self-attested documents mentioned above along with the opening amount. Your application will be processed within a few working days and a welcome kit is dispatched to your residential address.
Benefits of a savings account
Opening a savings account offers a lot of advantages aside from the assurance of readily available cash at your fingertips. These include:
1. ATM card:
Most banks offer their customers an ATM debit card that lets you withdraw cash when needed from bank ATMs all over India. This gives you the mobility as well as convenience to withdraw money during an emergency as well as for digital payments online.
If you maintain an adequate balance in your savings account, some banks may also offer you accident hospitalization, death benefit, and even life insurance. This gives you the additional advantage of protection when you open a savings account.
3. Locker facility:
Banks offer their savings account holders the facility to keep valuables in their lockers at discounted rates. You need to maintain a minimum quarterly balance in your account to avail of this service.
4. Higher interest rate:
While generally a savings account attracts a low-interest rate, some banks also offer higher interest rates of up to 7% to their customers. This is one of the most attractive benefits of a savings account since your idle cash is earning more interest than what it would normally do.
Now that you know the various benefits of a savings account and how to go about opening one in your name, you should look for a financial institution that is reputed and has earned the trust of its customers. With over 9.08 million customers across the world, RBL Bank provides a range of services across various sectors that can help you meet your financial needs. Choose from a range of savings accounts and open one easily online in just 5 minutes. So what are you waiting for?