To begin managing your personal finances, the first and most crucial financial product required is a savings account. A savings account is a popular and reliable way for individuals to save money. It’s an interest-bearing deposit account that banks offer, allowing the account holder to keep their funds safe while earning interest on their balance.
Savings accounts are usually used to manage daily transactions, build an emergency fund, save for a specific financial goal, or simply set aside money for future expenses. Here are the six different types of savings accounts that you can choose from:
- Regular savings accounts
Regular savings accounts are the most common type of savings accounts. They are basic savings accounts that require a minimum balance and offer an interest rate. The minimum balance required varies from bank to bank, and the interest rate on a regular savings account also varies.
The account holder can withdraw money anytime and make deposits at their convenience. They can also access their account online or through a bank branch.
- Zero-balance savings accounts
A zero-balance savings account is a type of savings account that does not require any minimum balance to be maintained.
The interest rates on zero-balance savings accounts are lower than regular savings accounts. They also come with certain limitations, such as a limited number of free monthly transactions. However, they are a convenient option for those who want to save without the pressure of maintaining a minimum balance.
- Kid’s savings accounts
These accounts are specifically designed for children. These accounts help children learn about saving money and instil financial discipline at an early age. Most banks offer these accounts with attractive features like no minimum balance, higher interest rates, and other benefits.
Parents or guardians can open the account in the name of the child. They can manage the account on behalf of the child until they reach the age of 18.
- Family savings accounts
Family savings accounts are joint accounts that family members can open. This account is ideal for families who want to manage their finances collectively. The account holder can add or remove members from the account at their convenience.
These accounts have certain benefits like a higher interest rate, unlimited free transactions, and other perks. The account holder can also avail of discounts on various products and services from partner companies.
- Senior citizens’ savings accounts
Senior citizens’ savings accounts are designed for senior citizens. These accounts come with higher interest rates, exclusive benefits, and privileges. The minimum balance required in these accounts is lower than in regular savings accounts.
The account holder can also avail benefits like free chequebooks, free ATM transactions, and discounts on various services. Senior citizens savings account benefit those who want to manage finances during retirement and earn a decent interest rate on their savings.
- NRI savings accounts
NRI savings accounts are for Non-Resident Indians who want to save money in India. These accounts allow NRIs to manage their finances in India and earn interest on their savings. The account holder can transact in Indian currency and transfer money from their foreign bank accounts.
The account holder can also avail free international debit cards, free remittance services, and other discounts. NRI savings accounts come in different variants like NRE, NRO, and FCNR, each with its own features and benefits.
Different types of savings accounts cater to the unique financial needs of different individuals. From regular savings accounts to NRI savings accounts, each account is designed keeping in mind the features and benefits that will be the most useful for each category of individuals. It is important to choose the right type of savings account that suits your financial needs.