6 MinsJan 3, 2022
In this digital age of cashless transactions, holding a bank account is integral to your financial needs - be
it for your personal savings or your business purposes. A bank account makes money work for you, facilitates
hassle-free transactions
almost 24x7, and keeps your hard-earned money secured.
Broadly, there are two types of bank accounts: 1) Current Accounts and 2) Savings Accounts. The Savings
Account is designed to meet the banking needs of people from all walks of life. Whereas the Current Account
is designed for the need of organisations
across different sectors. For you to make an apt choice, let’s understand both these accounts in
detail.
Savings Account
A Savings
Account helps you to park your monthly savings. The money parked in this account earns
you interest at
the rate of around 3.0%-3.5% per annum. It ensures that your hard-earned money is not lying idle, and it
works for you. The payout of the interest on your Savings Account happens every quarter.
Section 80TTA
of the Income Tax Act, 1961
allows a deduction of up to Rs 10,000 on the interest income earned on the Savings Account, thus helping you
to reduce your tax outgo. This deduction is available to Individuals and Hindu Undivided Families
(HUFs).
Need for Savings Account
It is useful for saving money from your monthly earnings, making productive investments, parking funds
for emergency needs, paying bills and addressing your liquidity needs.
- Make investments: It can be used to make investments in mutual funds, fixed
deposits/recurring deposits, etc. In other words,
the Savings Account could serve as a primary account for your investment activity.
- Pay bills: Besides, you could pay your utility bills, do your travel, hotel, and
movie ticket bookings, transfer money, etc. by using the net banking facility, or swiping the
ATM-cum-debit card at the point of sales,
or issuing a cheque.
- Cash withdrawal: And if you wish to withdraw cash to transact, it is possible to do
so using the ATM-cum-debit card.
Types of Savings Accounts
Axis Bank offers a variety of Savings Accounts, with frills and no-frills, catering to your needs and
financial habits as a customer. A range of options exists viz. Regular
Savings Account,
Small Basic Savings
Account with zero balance facility, Salary
Account, Senior
Citizen Savings Account,
Future Stars Savings Account for
children, and many more, each with distinguishing features and benefits. For example, the Senior Privilege Savings
Account designed
for senior citizens offers discounts /additional benefits on healthcare services, while those with
an Easy
Access Digital Savings Account can
enjoy offers and benefits across e-commerce portals. So, make sure you opt for a Savings Account that suits
your needs.
Current Account
Current Account is
most suited for regular transactions (in terms of cheque issuance, deposits, withdrawals, and D.D. issuance
etc.); and there is no limit on
the number of transactions you can perform.
Need for Current Account
If you are a professional or have your own business, a Current Account is useful as it would add to
your reputation, highlight your professionalism, and your investors, customers/clients would take you
seriously. Moreover, you would have
a clear picture of your business or professional transactions and segregate them from the personal ones
(with a Savings Account). It offers the following benefits:
- Ease of transactions: To run your business or carry on with your profession in
a smooth and organised manner, you have access to online NEFT/RTGS transactions 24x7, prompt SMS
alerts, e-mail alerts and more. Besides,
there is no limit on the issuance of free chequebooks and cash withdrawals (unlike a Savings
Account).
- Value-added services: Some banks, like Axis Bank, also offer allied services such
as CMS, Trade & Forex Services across the internet and mobile banking platforms, thus enabling
you to transact in a hassle-free and seamless
manner.
- Access to additional funds: To help you manage your working capital
requirements, you get access to the overdraft facility (on request) if you fall short of cash.
Types of Current Accounts
There is a varied range catering to businesses and professions. For example, the Normal
Current Account with Axis Bank has
a monthly cash deposit limit of Rs 2 lakh, whereas for the Current
Account–Advantage, Current
Account—Classic,
and Current Account—Privilege this limit is Rs 3 lakh, Rs 12 lakh and Rs 60 lakh,
respectively.
You can also open the Full Power Digital Current Account using Video-KYC in four easy steps and avail
of over 250 banking services. It offers features such as contactless account opening, zero document upload,
no service charges, and benefits
such as 1% cashback on E-debit card and up to 50% cashback through Grabdeals.
Axis Bank offers a variety of Current Accounts for individuals, HUFs, sole proprietorship concerns,
partnership firms, companies, trusts, Government bodies, across scales of operations and sectors. To explore
the different types of Current Accounts
offered by Axis Bank, click
here.
The minimum average balance to be maintained in a Current Account is higher (starting Rs 10,000 for the
standard Current Account) and depends on the nature of your business or profession. For Trusts, there
isn’t a minimum balance requirement.
Note that you do not earn any interest on the balance held in the Current Account simply because of the
fluid nature of the account i.e. frequent transactions.
Whichever choice of account you make, ensure you are assessing your requirement well and then finally keep
all your KYC documents handy, photographs, fill in the account opening form providing all the necessary
details, and the initial amount as required
to open the respective account. Except in case of Digital Current account where you need only Aadhaar Card
number and PAN Card.
Disclaimer: This article has been authored
by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm. Axis Bank doesn't
influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for
any direct / indirect loss or liability incurred by the reader for taking any financial decisions based
on the contents and information. Please consult your financial advisor before making any financial
decision