Saving hard-earned money is essential for your long-term financial wellbeing. And opening a savings account is the first step in this direction.
What is savings account?
A savings account is where you can park your monthly savings. You can withdraw the money from the saving account whenever you need, subject to the
withdrawal limits (unless it’s a zero-balance account). Hence, a saving account addresses your liquidity needs.
Paying utility bills, transferring money, withdrawals, and so on, can be handled conveniently with a savings account. Most banks today offer an ATM-cum-debit credit card on a savings account. With this card you can shop, earn reward points, get discounts,
cash-backs, and much more!
A savings account earns you interest at the rate of around 3% - 6% per annum; so your hard-earned money is not idle, it works for. Though the interest is low, the saving account is primary to invest in other wealth creating investment avenues. This
means, it is the principal to your investment activity.
Section 80TTA of the Income Tax Act, 1961 allows deduction of upto Rs 10,000 in respect of interest income earned on savings account. This deduction is available to an Individual and HUF.
Who should open a savings account?
Everyone should open a saving account, irrespective of economic strata, what you do for a living, and your residential status.
Unlike other banking and financial products, there are almost no restrictions to open a savings bank account. For minors too, a savings bank account can be opened by their parents/guardians.
Types of savings account:
There are a variety of saving bank accounts today, with frills and no-frills, with distinguishing features catering to your need. A regular savings account, salary account, senior citizen savings account, youth savings account, zero balance savings
account, linked savings account are some of the types of savings bank accounts.
If you are considering opening a savings account right away, Axis ASAP Instant Savings Account is perfect for you. This is a digital
savings account that can be conveniently opened online.
You can literally open an account in just a few minutes, following these simple steps:
1) Go on to: https://digital.axisbank.co.in/AxisDigitalBanking/html_pages/main.html
2) Enter your name
3) Enter you mobile number, Aadhaar, and PAN
4) Enter the OTP shared on your registered mobile number
5) Finally, your AXIS ASAP account is opened with a number assigned to it
It offers a stress free banking experience.
Axis ASAP Instant Savings Account comes with these exciting benefits:
- A zero-balance facility with no strings attached;
- Comes with a virtual debit card with exciting online shopping offers;
- You can do fund transfers;
- Pay utility bills;
- Book flight tickets and hotels and more;
- Earn Axis eDGE reward points;
- You can an invest in fixed deposits and recurring deposits;
- Earn a higher interest rate on auto-sweep deposits above Rs 10,000;
- Get benefits of Axis Internet and Mobile Banking; and
- Get detailed account statements
Here are some obvious advantages of a digital savings account like Axis ASAP Instant Savings Account:
- Efficient money management
- Banking on-the-go
- Avail exciting cash-backs and discounts offers
- No need to worry about banking hours
- No need carry wads of cash
- Can link to your investments avenues
- Comes handy in times of emergency
- Saves time and energy
- No monthly maintenance fee
- Less paper to handle
- You get access to Axis Internet and Mobile Banking
- Better control over finances
To open an Axis ASAP account, you need to be 18+ years of age and a resident of India (with a valid proof of address). Currently, joint holding is not permitted for this account.
Know more about Axis ASAP Account here…
The importance of keeping a salary account and savings account separate
Well, here are four benefits…
1. Keeps you organised –– Tracking expenses and streamlining budgets becomes easy.
2. Consciously directs you to save –– Transferring hard-earned money to a savings account helps in planning for your financial goals.
3. Works as a step to make productive investments –– You can opt for sweep-in deposits, flexi-deposit, SIP in mutual funds,
4. Addresses your liquidity needs –– You can park money for contingency purpose, for short-term needs, pay utility bills, etc.
Now speaking of Current Accounts…
What is a current account?
Current Account derives its name from the purpose they are most suited for: regular transactions. And there is no limit on the on the number of transactions you can perform.
Unlike a savings account, the minimum balanced to be maintained in a current account is higher. Moreover, the money in the account does not earn any interest (mainly because of the fluid nature of the account i.e. frequent transactions) and for certain
current accounts, there is a limit on cash withdrawals.
Who should open current account?
A current account is a must for those in business and/or profession. Be it a proprietorship concern, start-up, partnership firm, Limited Liability Partnership (LLP), One Person Company (OPC), private limited company, or a public limited company, everyone
needs a current account.
Here are the benefits of a current account:
1. Depositing money and defraying creditors gets simpler with cheque book and demand draft facility. You can set up Standing Instructions (SI) too. Access to online internet banking, phone banking, and doorstep banking, brings in the added convenience
too while you run your show, be it a business or profession.
2. A current account helps you segregate your business and/or profession finance with your personal finances, which is in the interest of your long-term financial wellbeing and tracking your business activity get simpler.
3. Holding a current account not only provides a clear picture about your business and/or profession, but also gives access to finance vide loans to expand business and/or profession, or for any other requirement, and builds a credit history.
Key points of distinction between a savings account and current account
|Features||Savings account||Current Account|
|Purpose ||Helps encourage saving and investing||Helps business and professionals, owing to frequent transactions|
|Interest offered||Around 3% - 6% per annum||Does not earn interest|
|Tax deduction||In respect of interest income earned, a deduction upto Rs 10,000 is available u/s. 80TTA of the Income Tax Act, 1961||Unavailable|
|Minimum Average Balance ||Low or zero-balance for certain accounts||High|
|Transaction limit||Restrictions apply and charges are levied after certain number of free transactions ||No limit|
|Suitable for||Everyone, irrespective of economic strata, what you do for a living, and your residential status. For minors too, a savings bank account can be opened by their parents/guardians. ||Business houses and professionals –– be it proprietorship concern, start-up, partnership firm, Limited Liability Partnership (LLP), One Person Company (OPC), private limited company, or a public limited company, etc. |
So, there’s an account for everyone.
Select your account wisely today and lead a healthy financial life. Make it a conscious effort to save more and invest wisely. Happy Banking!
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.