Seeing the present banking penetration it can be said that almost every earning person has a savings account. A savings account is your bank account in which you deposit money. This account is used for keeping money and for money transactions, but few people know that there are many other benefits of a savings account. What you must know about a savings account?
- Highly liquid
People keep their money in the savings account. Money can be deposited in this account and money can also be sent to anyone from this account. Any bill payment can also be done from the savings account. Various types of government subsidies also come in this account and standing instruction can also be applied for all types of payments, so that money is automatically deducted on the due date. These functions make savings account as liquid as real cash.
- Provides multiple payment options
With a savings account, a person can make transactions through debit cards, cheques and internet banking. A savings account can also be used for transactions through mobile apps of all banks. Besides, you can keep a check on how many transactions you did from your savings account, how much you pay and how much money you receive from where.
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- A minimum balance is required
There are different types of savings accounts and they require different amounts to maintain as some minimum balance. However, there are some savings accounts that do not have any minimum balance requirement. If the minimum balance is not maintained in the savings account in which the minimum balance is required, then you have to pay some fine.
- Offers interest on parked money
You also get interest on the money you keep in the savings account. This interest is paid quarterly, half-yearly and annually. Different banks also offer different interest rates for different periods. Right now it is around 3-4 per cent, which always varies at different times. A savings account earns less interest, so if you want to keep the money in your account for a longer period, then you can get more interest by making a fixed deposit.
- Earned interest calculated as income for taxation
Most importantly, the interest earned on the savings account is taxable. According to the rules of income tax, if the amount of interest received from the savings account exceeds Rs 10,000, then you will have to pay tax on it under section 80TTA. For senior citizens, this limit is 50 thousand rupees under 80TTB. How much tax will be charged will depend on which tax slab you fall in.
So, if you want to earn good interest on savings, then go for FD or RD. But these instruments are not as liquid as a savings account. But, don’t worry, here are some banks that are offering 7 percent or more interest on the savings account itself. Let’s have a look at these banks.
- Jan Small Finance Bank is offering 3.5 percent to 7.3 percent interest.
- AU Small Finance Bank is giving interest at the rate of 3.5 per cent to 7 per cent.
- With ESAF Small Finance Bank, you will get interest ranging from 4 percent to 7 percent.
- Equitas Small Finance Bank is giving 3.5 percent to 7 percent interest.
- Ujjivan Small Finance Bank is offering 4 percent to 7 percent interest.
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