What is a Savings Bank Account? Who uses Saving Bank Accounts?

These deposits accounts are one of the most popular deposits for individual acco
unts.
These accounts not only provide cheque facility but also have lot of flexibility
for
deposits and withdrawal of funds from the account. Most of the banks have rules
for
the maximum number of withdrawals in a period and the maximum amount of
withdrawal, but hardly any bank enforces these.
However, banks have every right to enforce such restrictions if it is felt that
the account
is being misused as a current account. Till 24/10/2011, the interest on Saving B
ank
Accounts was regulated by RBI and it was fixed at 4.00% on daily balance basis.
However, w.e.f 25th October, 2011, RBI has deregulated Saving Fund account inter
est
rates and now banks are free to decide the same within certain conditions impose
d by
RBI.
Under directions of RBI, now banks are also required to open no frill accounts (
this
term is used for accounts which do not have any minimum balance requirements).
Although Public Sector Banks still pay only 4% rate of interest, some private ba
nks like
Kotak Bank and Yes Bank pay between 6% and 7% on such deposits.
From the FY 2012-13, interest earned up to Rs 10,000 in a financial year on Savi
ng
Bank accounts is exempted from tax u/s 80 TTA.
Identification of growth areas in SB Account.
- Introducing the hassle free Biometric ATM s
- Tailor made Accounts for organized and Unorganized Sector customers as per
their need.
- Customized Interest rate for the customers based on the bank balance
maintained.
- Single account number concept for all the banks. (using the common CUST
ID#)
- Auto conversion as FD/RD etc. obtaining the customers permission.

Present SB perks offered to the customers by various banks

Some banks offer discounts at eating joints/shops associated with them.

They also offer a customized account. So, if you keep a large balance in
your savings account, your bank will offer to upgrade the account or add
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some benefits.

Locker discount
Depending upon the minimum average quarterly balance and the
account you choose, some banks offer a 15-30 per cent discount on
locker fee. Normally, this is for accounts where the minimum average
quarterly balance is Rs 50,000 and above.

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Insurance
Some offer over-the-counter insurance products like accident cover or
life insurance with accident cover. Some banks also insure debit cards in
case they are stolen or misused. In such a case, there is a purchase
protection clause too. This ensures that you are reimbursed up to a
certain limit in case your stolen or misplaced debit card is used for shopping.

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Discount on gold products
A number of banks offer 2-5 per cent discounts on gold coins sold by
them, especially to privileged customers who maintain large balances in
their accounts

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International debit cards
International debit cards, which can be used for shopping and
withdrawing cash from ATMs abroad, are offered free of cost.

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Cash withdrawal
Many banks offer privileged customers any number of cash withdrawals
from other banks' ATMs. In addition, they increase the maximum
amount one can withdraw at a time from ATMs.

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Sweep facility
In this, funds beyond a limit are transferred to a fixed deposit. When
you need the money, the bank transfers the amount requested to the
savings account. The fixed deposit earns a rate that is applicable for the
period it is held. You can also withdraw the term deposit money from ATMs withou
t
first transferring it to the savings account.

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Price gain
Banks also offer benefits such as waiver of annual fee for demat
accounts and lower charges for demat and trading accounts.
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For the family
Some banks extend special facilities to family members who have an
account with them. One such facility is clubbing of all family members'
deposits. Some offer education insurance with accounts for children.
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What is a Current Account? Who uses current accounts? Current Accounts in

Banks

Current Accounts are basically meant for businessmen and are never used for the
purpose of investment or savings. These deposits are the most liquid deposits an
d there
are no limits for number of transactions or the amount of transactions in a day.

Most of the current account are opened in the names of firm / company accounts.
Cheque book facility is provided and the account holder can deposit all types of
the
cheque s and drafts in their name or endorsed in their favour by third parties.
No interest is paid by banks on these accounts. On the other hand, banks charges
certain
service charges, on such accounts.

MAJOR FEATURES OF CURRENT ACCOUNTS:

(a) The main objective of Current Account holders in opening these account is to
enable them (mostly businessmen) to conduct their business transactions smoothly
.
(b) There are no restrictions on the number of times deposit in cash / cheque ca
n be
made or the amount of such deposits;
(c) Usually banks do not have any interest on such current accounts. However, in
recent times some banks have introduced special current accounts where interest
(as
per banks' own guidelines) is paid.
(d) The current accounts do not have any fixed maturity as these are on continuo
us
basis accounts.
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