Savings account is often the first port of call for starting your personal finance journey. Capital protection and income certainty features of savings accounts makes them an extremely popular instrument to park your savings to meet your short-term financial goals. However, there is not one, but different types of savings accounts designed to meet different purposes.
Here are 7 common savings account types you must be aware about:
- Regular savings account
Regular savings account serves the purpose of parking your savings in a highly secure place. In return, interest is credited on the amount parked to your savings account. This interest varies from one bank to another. Note that in a regular savings account, you generally require to keep an MAB (minimum balance amount). Failure to maintain the required MAB may incur penalty on your account.
- Basic savings account
Basic savings account helps you access your account without the requirement to maintain any MAB and is part of Pradhan Mantri Jan Dhan Yojana scheme. Few important advantages of basic savings accounts include free passbook facility, free debit card and free SMS alerts.
- Instant savings account
Instant savings account is the same as a regular or basic account. However, the prime difference here is while a regular account may require you to approach the financial institution physically for opening the account, an instant savings account can be instantly opened online with a few clicks.
- Women savings account
Like a regular savings account, Women savings account is customized to match the needs of women. An MAB of course is a must to maintain the account. Besides this, such accounts come with various benefits like discounts on lockers, dedicated banking assistance, preferential rates on personal loan, home loan and car loan, special debit card, complimentary insurance on debit card, higher ATM cash withdrawal limit etc.
- Senior citizens’ savings account
Senior citizens’ savings account is solely offered to meet the requirements of senior citizens. The account generally offers investment benefits in the form of preferential fixed deposit rates and health linked benefits through insurance, discounts on several diagnostic centers etc.
- Kids’ savings account
This account is tailor made for the parents looking to park savings in their kids’ name. Benefits of this account may include free insurance cover in the case of the demise of the parent, provision of money maximizer or sweep out facility etc. Also, if the parent allows the kid to use the account’s debit card, then it can be a prudent way to instill financial discipline in children.
- Family savings account
This account permits all members in the family to meet their different banking needs through one platform. The account provides a wide range of benefits in the form of free cash withdrawal through any bank ATMs, lifetime free debit card, discount on locker, etc.
Savings account can be opened according to your preference and requirement wherein you can park a portion of your monthly income in the form of savings. However, as there are different types of savings accounts, you should review all the types of bank accounts offered by the financial institutions to make an informed choice.