Thursday, August 19, 2010

Savings Bank Account simplified

Savings Bank Accounts are meant to promote the habit of saving among the citizens  and  also facilitates safekeeping of money. The main advantage of Savings Bank Account is its high liquidity and safety. In this scheme money is allowed to be withdrawn whenever required, without any condition. Hence a savings account is a safe, convenient and affordable way to save your money. On top of that Savings Bank Account earn moderate interest too. The rate of interest is decided and periodically reviewed by the Government of India. Presently, the rate of interest is 3.5% compounded half yearly.

Savings Bank Account can be opened in the name of an individual or in joint names of the depositors. Savings Bank Accounts can also be opened and operated by the minors provided they have completed ten years of age.

The minimum balance to be maintained in an ordinary savings bank account varies from bank to bank. It is less in case of public sector banks and comparatively higher in case of private banks. In most of the public sector banks, minimum balance to be maintained is Rs. 100. In accounts where cheque books are issued, a minimum balance of Rs. 500/- has to be maintained. For Pension Savings Accounts, minimum balance to be maintained is Rs. 5/- without cheque facility and Rs. 250/- with cheque facility.

Things to Consider While Opening a Savings Account

It is advisable to seek the following information from bank before opening the account:
  • Minimum balance requirements.
  • Penalty in case the balance falls below the minimum stipulated amount
  • Penalty in case of return of cheques issued or instruments sent on collection.
  • Collection facilities etc. offered and charges applicable.
  • Details of charges, if any for issue of cheque books and limits fixed on number of withdrawals, cash drawings, etc.
Document Required For Opening a Savings Account
  • Two passport size photographs
  • Proof of residence i.e. Passport/driving license/Gas / Telephone / Electricity Bill/ Ration card/voters identity card
  • An introduction of the person from an existing account holder.
  • PAN number / Declaration in form no.60 or 61 as per the Income Tax Act 1961.

Here's how you can legally claim tax relief on HRA receipts

Here's how you can legally claim tax relief on HRA receipts Read  More