Savings accounts pay interest. The value differs from one bank to another. You can always opt for a high-yield savings account if you’re not satisfied with the interest you’re currently earning on your account. In this article, we explain the importance of interest rates for savings accounts offered by banks, the points to remember while choosing a savings account, and the documents required to open an account.

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What is a savings bank account, and why is it important?

A savings account is a deposit account offered by banks like IDFC FIRST Bank to help customers deposit their savings securely. Its primary purpose is to help customers increase their savings by depositing money periodically in the account. A savings account can also serve as a salary account, which allows customers to receive their monthly salary in the savings account.

You can carry out fast and secure transactions through a savings account and can do so from the comfort of your home through net and mobile banking.

What should be kept in mind during savings account opening?

Look for the following features before opening a savings account in India:

  • Look for a high interest rate

The interest rate offered by the bank for its savings account should be high.

  • Check if the account is UPI-enabled.

If a savings account is UPI (Unified Payments Interface) enabled, it can help you make fast and secure online transactions.

  • Check for any minimum balance requirement.

Banks generally require customers to maintain a minimum monthly balance in their savings accounts. A failure to maintain this minimum balance may attract a penalty.

  • Check the ATM withdrawal fee.

The bank charges an additional fee once the customer exceeds the maximum number of free ATM transactions. It is essential to check this fee.

  • Net and mobile banking facility

You can benefit significantly from a bank’s net or mobile banking facility. It can help you carry out transactions from the comfort of your home.

  • Check for any add-on benefits.

Many banks provide add-on benefits when signing up for a savings account, such as a personal accident or health insurance coverage.

How vital is interest earned on a savings account?

Given that the purpose of a savings account is to help save more money, customers consider a savings account’s interest component the most while choosing their preferred bank. The interest rate is critical when opting for a savings account. The higher the interest rate a bank offers, the higher your savings. The interest rates offered by banks on savings performances usually range from 2.70% per annum to 7.00% per annum.

What are the documents required to open a bank account?

While the documentation for most savings account openings remains the same, the documentation for certain banks might change. Here are the documents required for opening a savings account with IDFC FIRST Bank:

  • Digital bank account opening
  • Aadhaar card
  • PAN (Permanent Account Number) card
  • Physical bank account opening
  • Passport-size photograph
  • If you have a PAN card, you must provide it while opening your account.
  • Any one of the following documents:
  • Aadhaar card
  • Passport
  • Voter’s identity card
  • Permanent and valid driving license
  • A job card issued by NREGA duly signed by an officer of the State Government.
  • A letter issued by the National Population Register containing your name and address.

You can consider IDFC FIRST Bank’s high-yield savings account if you’re in the market for a high-yield savings account. You can also use their savings account interest rate simulator to compare your bank’s interest rate with IDFC FIRST Bank’s.