What is Savings Account?• A deposit account held at a bank or other financialinstitution that provides principal security and amodest interest rate.• Depending on the specific type of savingsaccount, the account holder may not be able towrite checks from the account.• Savings account funds are considered one of themost liquid investments outside of demandaccounts and cash.
Types of AccountsTraditionally banks in India have following types ofbank accounts.– Current account– Saving account– Recurring Deposit account– Fixed deposit account
How Savings Account Work• You open savings account with the bank.• The bank pays you certain interest on the moneythat you deposit in your account.• The bank then loans that money out to otherpeople, only they charge a slightly higher interestrate on the loan than what they pay you for youraccount.
How Savings Account WorkLoan given by BankRepayment of LoanInterest paid on theamount used bybankOpen’s SavingsAccount
Benefit of Savings Account• Bank savings account are relatively safer and helpssave your money.• The bank pays you interest on the money you keepin your account.• High-yield savings options• Get started with minimal cash
Features of Savings Account• Helps keep your money liquid with interest rates.• You can use your account to shop online.• Provides facility to transfer your money to otherpeople safely.• Now a days all banks provide with Debit card whichhelps you remove money from your savingsaccount using bank ATM.
Saving Account VS Other AccountsSavings Account Current AccountTo promote savings To facilitate multiple transactionsUsed by salaried person Used by Business personLess amount required Higher amount required4% to 6% interest rates No interest is paid
Banks Offering Savings AccountName of bank Max. rate of interestYES Bank 6%Kotak Mahindera Bank 5.50%IndusInd Bank 5.50%Axis Bank 5.25%ICICI Bank 5%