What is a Savings Account? How Does it Work?

Posted on Thursday, July 18th, 2024 | By IndusInd Bank

A savings account is crucial for managing your finances effectively. You can save for various purposes while having easy access to your funds. Choosing the right bank, such as IndusInd Bank, ensures that your savings account is more than a place to park your money. It is one of the pillars for securing your financial future. 

Read on to learn what a savings account is, its benefits, how to open one, and more.  

What is a Savings Account?

A savings account is a type of bank account provided by banks and financial institutions. Once you open a savings account with a bank, you can deposit money into it. The funds deposited earn interest and grow over time depending on the bank’s prevailing interest rates.  

A savings account has no lock-ins. Thus, you can withdraw funds when you need them.  

Savings Account Definition

As per the savings account definition, it is a bank account that allows individuals to deposit their savings. By depositing your money into a savings account, you enjoy its gradual growth while benefitting from liquidity and negligible investment risks.  

You enjoy competitive interest rates, attractive offers and deals, seamless banking, and more when you open a savings account with IndusInd Bank.  

Now that you understand what a savings account is, let’s dive into its benefits.  

What Are the Benefits of Having a Savings Account?

If you open a savings account, these are some of the benefits you enjoy:  

1. Safe Place to Store Money

As mentioned earlier, a savings account is an ideal tool for storing your funds securely. With the bank’s security measures in place, your funds will remain protected.  

2. Liquidity 

One of the key benefits of having a savings account is that you can withdraw funds whenever you need them. You can locate an ATM and withdraw cash or make online transactions too.  

3. Steady Growth of Funds

Letting your money sit idle is a crime. The funds deposited in a savings account earn interest, unlike when kept at home. Hence, choosing a banking partner that offers competitive savings account interest rates is crucial.  

4. Additional Services and Features 

Nowadays, one can enjoy attractive features with their savings account to make their finances work in a better way. 

For instance, IndusInd Bank offers the Smart Sweep feature with its Indus Multiplier Max Savings Account. The USP of this savings account is that any excess balance over Rs 20,000 automatically converts into a Fixed Deposit (FD), allowing your money to earn higher interest. In case of a shortfall of funds in the savings account, a portion from the FD is broken and shifted back to the savings account. Also, there is no premature closure penalty applicable in this case.  

5. Offers and Deals

Another benefit of having a savings account is access to exclusive offers and deals. These can range from discounted movie tickets to dining vouchers, and even cashback rewards on purchases. 

Choosing a banking partner that provides the features and benefits you need is advisable.  

Also Read: Benefits of Family Grouping in Online Savings Account 

What are the Different Types of Savings Accounts?

Now that you have understood what the benefits of a savings account are, let’s look at the different types of savings accounts available in India.  

1. Regular Savings Account

This type of savings account is ideal for your everyday banking needs. Usually, this type of account may have a minimum balance requirement.  

2. Family Savings Account

If you want your loved ones to enjoy the benefits and privileges of a single savings account, you can consider a family savings account.  

For instance, IndusInd Bank’s Select Savings Account allows you to share your account privileges with up to 4 family members for free!  

3. Salary Savings Account

When new employees join an organisation, they usually open a salary account with a bank with which their employer has a tie-up. The employee has complete control over this savings account and can continue using it after leaving the organisation.  

4. Premium Savings Account

A Premium savings account is a high-end savings account that allows you to enjoy exclusive benefits. These include a dedicated relationship manager or team, lifestyle privileges, lounge access, personalised wealth management solutions, and more.  

5. Senior Citizen’s Savings Account 

Tailored to meet the needs of individuals over 60 years of age, a senior citizen’s savings account often provides health and investment-related benefits. Most banks offer a slightly higher FD interest rate than the standard for senior citizen account holders.  

6.  Zero-Balance Savings Account 

The USP of this type of savings account is that it does not have a minimum balance requirement. The bank does not impose any penalty or charges even if the account balance dips to zero.  

7. Instant Digital Savings Account 

As its name suggests, this type of account can be opened instantly and digitally. You can open it via the bank’s mobile application or their website. The KYC for the process can be carried out virtually.  

8.  Women’s Savings Account 

Some banks offer special savings accounts designed for women. Account holders get benefits such as rewards and offers on shopping, discounts on lockers, and more. There may be a relaxed minimum balance requirement too.  

9. Kids’ Savings Account

Parents looking to save for their children (under 18 years) can do so under a kids’ savings account. The child can have limited access to the account, which can help them learn about banking and money management from a young age.  

Review your banking needs and choose a savings account that is right for you. 

How to Open a Savings Account?

Having understood the meaning of a savings account, its benefits, and types, let’s look at how to open one with IndusInd Bank.  

Before we begin, note that the IndusInd Bank account opening process is instant, completely digital, and paperless.  

Here’s how you can start your savings account journey in a few simple steps: 

1. Create and Personalise Your Account Number

IndusInd Bank allows you to select your preferred account number. You can input your mobile number and use it as an account number if you prefer. Thus, you have the flexibility to customise the account number to your liking.  

2. Fill in Essential Information

Next, fill in important personal details such as name, contact information, date of birth, and address. Also, keep your Aadhaar card and PAN details handy for verification purposes. 

3. Add Funds to Your Account

After the bank verifies your account, you can deposit money and enjoy a steady growth in your savings over time.  

4. Go Through the Video Call KYC 

Gone are the days of lengthy paperwork with hassle-free video KYC process from IndusInd Bank. You can complete Know Your Customer (KYC) verification via a simple video call within a few minutes.  

Who Can Open a Savings Account?

The following entities can open a savings account: 

• Individuals above 18 years of age 

• Minors, with the help of their parents or guardians 

• A foreign citizen 

• A Hindu Undivided Family 

Rules and documentation differ based on whether it is an individual or an entity opening the savings account.  

The Bottom Line 

The bottom line is that opening a savings account is an essential step in one’s financial journey. Make the most of your savings account using digital banking services, competitive interest rates, exclusive offers and deals, and more with IndusInd Bank’s Savings Accounts. 

So, what are you waiting for? Apply for a Savings Account right away!  

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.