A savings account is a primary and basic type of bank account you can open with any bank, and almost every financial institution offers this one. But each bank has its own features for this basic bank account which can make you wonder what to know before opening a savings account.
What to Know Before Opening a Bank Account?
If you are opening a savings account, or a bank account in general, for the first time, there are several factors to keep in mind. Choosing the right bank that aligns with your financial goals and needs is necessary, so here are eight things to know before opening a bank account:
- Interest Rate
Savings accounts usually carry a low-interest rate when compared to other investment options. The average rate of interest on savings accounts in India in 2023 is usually between 2.7% to 7% annually. So, you may want to surf your options in a savings account by reading about the interest rates given on your savings by different banks.
- Minimum Balance
The next and most important thing to know before opening a bank account is to enquire about the minimum balance required to keep your savings account active and ditch the penalties and additional charges acquired because of not keeping the minimum balance in the account. This is an essential factor to consider because some banks have certain penalties for not maintaining the minimum account balance requirement.
Today, several banks offer a zero-balance account, so you won’t have to maintain a minimum limit in the account or be subject to penalty fees for it.
- Online and Doorstep Banking Facilities
Most banks offer online banking services these days, but some banks, even today, won’t allow you to perform some important online transactions. Further, some banks provide online facilities, but their online portal may not be user-friendly. So, if you prefer online financial conveniences, look for a bank with 24×7 banking amenities.
Another factor to consider when opening a savings account is the doorstep banking facilities. If you are consumed with a hectic lifestyle and are unable to visit the bank branch for any bank-related work, opening a bank account with a facility that provides doorstep banking conveniences is a good option.
- Service Charges
Along with paying you an interest rate on the amount you save with the bank in their account, banks even charge you some fees for using their services. These services may include:
- Making more ATM transactions than the free ones
- SMS alerts
- Issuing chequebooks after the number of free quotas
- Deposit and withdrawal fees
A bank will be transparent on fees and service charges, but it’s always better to ask about yearly fees for any debit card, locker, or credit card.
- Branch Network
In this digital era, almost everyone in India uses various types of transaction methods like online banking, credit cards, mobile banking, UPI, and more. But there are some financial operations that can’t be carried out online and need to be done by visiting a branch only. Hence, a network of branches is another thing to know before opening a bank account so that you have a nearby branch to go to.
- Deals on Debit Cards
Some banks will offer competitive deals on their debit cards as a means to survive the competition with other banks. So, looking for deals on debit cards is also an essential factor to consider when opening a savings account.
- Credit Services
Generally, it’s easier to get loans from the bank you already have an account with because when giving a loan, the banks will see your banking history, and if you have an excellent banking history with them, you’re likely going to get a loan easily. On top of this, some banks even provide pre-approved loan facilities for borrowers with a great credit history.
So, look for credit services like these when considering opening a savings or bank account with any bank.
- Other Financial Products
Apart from a basic savings account, many people also want to work with a bank that also provides other necessary investment options like recurring deposits, fixed deposits, mutual funds, lockers, insurances, loans, and more. So, make sure you also look for such features when opening a bank account.
There are several questions to ask when opening a savings account or any other type of account with a bank to ensure the bank you are trusting your money with will offer you great customer service and the right deals. We hope these points helped you!