What is a Savings Account and how does it work?

By building a savings habit, you are practising one of the top pillars of smart financial management. If saving regularly can prove to be a difficult task for you, this is where a Savings Account can come to your aid.

What is a Savings Account?

A Savings Account is a financial product offered by banks that serves as a secure avenue to store money while earning steady interest. It's a crucial tool for managing finances, enabling tasks such as money transfers, shopping, handling emergencies, investments etc. Its easy accessibility makes it a versatile, liquid savings option.

What are the benefits of having a Savings Account?

Now that we have addressed the question — what is a Savings Account? — let us understand its benefits.

• You can park your funds in a secure deposit account that earns a fixed interest, ensuring your savings are safe and grow at a steady rate.
• You get access to a Debit Card, allowing you to withdraw cash with ease whenever you need funds.
• It can serve as a one-stop solution for managing all your finances, including tasks such as transferring money, paying bills, shopping, and making investments via NetBanking or mobile banking.
• You gain access to exclusive deals, cashbacks, and reward programs with some variants of Savings Accounts.

Also Read: 6 things to consider before opening a Savings Account

Who can open a Savings Account?

The individual applying for savings accounts should be residing in India. Anyone above the age of 18 years can open a savings account, except in the case of a minor savings account. Eligibility for a Savings Account can differ based on the chosen variant, user type (individual or joint), and the method of account opening (Physical or Digital Savings Account).

Savings Account mechanism

Operating a Savings Account is a seamless process:

• Deposit funds via a cheque or online bank transfer.
• Withdraw funds via the ATM or transfer funds to another account via online banking.
• You can leverage internet banking, mobile banking or your Debit Card to make online and offline purchases.
• The interest earned on your Savings Account is credited to your account every quarter.
• Maintain the prescribed minimum funds in your account to avoid paying penalties.

Also Read: Savings Account uses you might not know about

Types of Savings Accounts

Choosing the appropriate savings account is essential. It should match your money management and saving style. Take into account how often you'll use it, the balance you intend to keep, and any extra features you may want, like lifestyle benefits. Here are the different categories of Savings Accounts -

1. Basic Savings Account

Also known as a Zero-Balance Account, you can open a Basic Savings Account without depositing funds. You get access to a Debit Card and lots of other banking services.

2. Regular Savings Account

Regular Savings Account is the most common type of savings account. You have to maintain a certain minimum balance to operate this account. You are eligible for a debit card and can avail host of complementary banking services. Some variants also offer lifestyle benefits such as discounts, cashbacks and reward points.

3. Premium Account

If your income falls in a higher bracket, it is prudent to open a Premium Savings Account. Different banks offer different variants with privileges such as a complimentary Credit Card, high insurance coverage and locker discounts. You need to maintain a certain minimum balance to operate this account.

4. Women’s Savings Account

As the name suggests, this account is specifically designed to empower women consumers to derive more value from their savings journey. Perks include exclusive deals on shopping, rewards programs, and a low account opening balance.

5. Senior Savings Account

If you are aged 60 years and above, you can open a senior’s account, which allows you to earn a slightly higher interest on Fixed Deposits. The age criteria may vary among banks. Enjoy privileges such as discounts at health centres and extra support at bank branches.

6. Kids Savings Account

It is a great idea for parents to start a Savings Account for children to help them inculcate the habit of savings early. For instance, Axis Bank offers the Future Stars Savings Accounts. Once your child turns 18 years of age, they can manage the account themselves.

Axis Bank provides an array of savings accounts tailored to diverse needs and financial preferences. These include a regular savings account, salary account, senior citizen savings account, zero balance savings account etc. Each account is equipped with unique features and benefits crafted to suit specific lifestyles.

For instance, if you are looking for zero balance account, you can explore a Basic Savings Account or an Infinity Savings Account. Customers with a Senior Privilege Savings Account may be eligible for discounts or additional services on healthcare, while those with an Easy Access Digital Savings Account can enjoy special offers on various e-commerce platforms. Thus, you can select the savings account that best suits your needs. You can activate your account with a paperless onboarding process and a video Know Your Customer (KYC) process.

Also Read: 10 benefits of opening an Axis Bank Digital Savings Account

Conclusion

As a financial consumer, you must have a Savings Account to access a secure place to deposit and grow your savings. Your account comes with varying perks such as a Debit Card, a rewards program, insurance coverage, and exclusive shopping deals. You can also transact online via the NetBanking and mobile banking options. Now that you have all the information, it is time to open a Savings Account, and start your savings journey with Axis Bank!

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision