What are the Different Types of Savings Accounts in India?

The savings account is the most common type of deposit account used by holders to save a part of their income. It relieves the stress of holders by providing financial security while ensuring interest on the account balance.

Banks and NBFCs offer different types of Savings accounts to their customers. However, most banks offer similar variants and serve similar functions. This article will extensively discuss the various savings accounts offered by banks in India.

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What Are the Different Types of Savings Accounts?

Banks provide several savings account options to all their customers. Some of these accounts are designed to offer special benefits to their customer's needs. Here is a list of the most important types of savings bank accounts.

1. Traditional or Regular Savings Account

This is the most common type of savings account. A Regular Savings Account is mostly used by people looking for short-term savings. Banks provide the interest on the amount present in the account.

Opening a regular savings account is very easy; you just need to provide all the necessary documents, such as id proofs and address, along with passport photos. Once the KYC process is completed, you will receive the fully operational bank account.

Features of Regular Savings Account

Here is a list of the essential features of the Regular Savings Account:

Easy Transactions
ATM Facility
Automated Bill Payment
Internet Banking
Debit Cards
Interest Yield

Pros and Cons of Regular Savings Account

Pros: Regular savings accounts provide security along with interest yield. It also provides liquidity. You can make withdrawals and deposits at any time and any place.

Cons: Minimum balance requirements and changing interest rates are the biggest disadvantages of regular savings accounts.

Interest Rates: 2.5% to 7% per annum depending upon the banks

Minimum Balance Requirement: ₹1000 (depends on banks)

Banks Offering the Account: State Bank of India, HDFC Bank, Kotak Mahindra Bank, DCB Bank, RBL Bank, IndusInd Bank, ICICI Bank, Axis Bank and many more.

2. Zero Balance or Basic Savings Account

In zero-balance savings accounts, holders do not have to maintain the minimum balance. Since there are no minimum account balance requirements, banks restrict some facilities on these accounts.

For example, they restrict the number of withdrawals from the ATM, debit card, and chequebook facilities.

Features of Zero Balance Savings Account

Here are all the important features zero balance savings accounts provide:

No Minimum Balance
Free Passbook
Free Cash and Cheque Deposits
Digital Payments

Pros and Cons of Zero Balance Savings Account

Pros: Other than no minimum balance requirements, zero balance accounts offer 3 - 5 free withdrawals in a month. Some banks even offer special benefits such as rewards points and insurance options.

Cons: Zero-balance savings accounts come with some major flaws as well. Most important are lower interest rates and lesser privileges. Another major drawback is the ₹1 lakh deposit limit restrictions.

Interest Rates: 4% to 7% per annum

Minimum Balance Requirements: 0

Banks Offering the Account: IndusInd Bank, IDFC Bank, RBL Bank, Kotak Mahindra Bank, Standard Chartered Bank, HDFC Bank, State Bank of India, Axis Bank and many more.

3. Women’s Savings Account

It is a type of savings deposit account designed specifically to keep women in mind. These savings accounts provide several benefits, such as cashback offers, lower loan processing fees and other benefits that regular accounts do not provide.

Features of Women’s Savings Account

The following are the features of women's savings accounts:

Protection by Providing Insurance
Free Passbook Facility
Special Discounts
Maximum Possible Interest Yield
Debit Card Facilities
Free Email Statements

Pros and Cons of Women's Savings Accounts

Pros: Women's savings accounts offer slightly higher interest rates than regular saving accounts. Other than that, it provides insurance coverage such as personal accident insurance and health insurance, etc.

Cons: Limitations on maximum deposit amounts, restricted withdrawal options, and eligibility criteria are the most critical cons of women's savings accounts.

Interest Rates: 3.5%-7% per annum

Minimum Balance Requirements: ₹10000 (depends on bank)

Banks Offering the Account: HDFC Bank, RBL Bank, Kotak Mahindra Bank, and ICICI Bank offer the best women's savings account.

Features of Women’s Savings Account

The following are the features of women's savings accounts:

· Protection by Providing Insurance

· Free Passbook Facility

· Special Discounts

· Maximum Possible Interest Yield

· Debit Card Facilities

· Free Email Statements

Pros and Cons of Women's Savings Accounts

· Pros

Women's savings accounts offer slightly higher interest rates than regular saving accounts. Other than that, it provides insurance coverage such as personal accident insurance and health insurance, etc.

· Cons

Limitations on maximum deposit amounts, restricted withdrawal options, and eligibility criteria are the most critical cons of women's savings accounts.

Interest Rates: 3.5%-7% per annum

Minimum Balance Requirements: ₹10000 (depends on bank)

Banks Offering the Account: HDFC Bank, RBL Bank, Kotak Mahindra Bank, and ICICI Bank offer the best women's savings account.

4. Senior Citizens’ Savings Account

This type of savings account is for senior citizens above 60 years in India. These accounts come with insurance and investment benefits. Other special benefits of the savings account include preferential interest rates, lower interest yield on credit such as loans and credit cards and a dedicated relationships manager.

Features of Senior Citizens’ Savings Account

Here is a list of the essential features of the Senior Citizens' Savings Account:

Quarterly Revision of Interest Rates
Maturity Tenure of 5 Years
Premature Withdrawals and Account Closure
Quarterly Disbursal of Interest Amount
Nomination Facility

Pros and Cons of Senior Citizens' Savings Accounts

Pros: Other than higher interest rates and quarterly interest disbursals, some banks include health insurance and investment.

Cons: The major cons of the Senior Citizens' Savings Account are no interest on unclaimed interest income, TDS and fixed interest rates.

Interest Rates: 8.2% per annum

Minimum Balance Requirements: ₹10000 (depends on bank)

Banks Offering the Account: Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of Maharashtra, Central Bank of India, Bank of India, Canara Bank, and Corporation Bank

5. Kids’ Savings Account

It is a type of savings account that is designed for minors between the ages of 10 and 18. A child's parent usually manages the deposit account. Opening a child savings account may involve different requirements and offer different benefits compared to regular or employee savings accounts.

Features of a Kids’ Savings Account

Here are all the features offered by the Kids’ savings accounts:

Attractive Interest Rates
Debit Cards
Discounts and Privileges from Children Brands

Pros and Cons of a Kids’ Savings Account

Pros: Parents and children both can withdraw money at any time, but in some cases, kids require their parents' permission. Other than that, it teaches kids to save for personal goals and learn about how finances work.

Cons: It is not meant for long-term savings, as kids' savings accounts do not offer all the benefits of regular savings accounts.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: ₹500 (depends on bank)

Banks Offering the Account: IndusInd Bank, Axis Bank, HDFC Bank, ICICI Bank, IDBI Bank, Kotak Mahindra Bank, SBI Bank and many more.

6. Family Savings Account

The family savings account is a type of savings account that allows individual members of a family to form a group and keep their respective accounts under one Family Savings Account. It eases the whole process of financial management of a family.

Features of Family Savings Account

All the features to be availed from Family Savings Account are:

Multicity Cheques
Waives up to ₹50000 on Demand Drafts
Discounts on the Annual Fee for Deposit Lockers

Pros and Cons of Family Savings Account

Pros: Family savings accounts help save money much faster than a normal savings account. These savings accounts help families and individuals work towards long-term financial goals.

Cons: A major flaw of the family savings account is that the funds collected from family savings accounts can be used for specific investments only.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: ₹10000 (depends on bank)

Banks Offering the Account: HDFC Bank, Kotak Mahindra Bank, ICICI Bank, Union Bank and many more.

7. Corporate Salary Account

Among the different types of savings accounts offered by banks corporate salary account is one of the essential savings accounts. A salary account is essentially a savings account. An employer opens it for their employees to deposit their salary every month.

Features of Corporate Salary Account

Here are all the features of corporate salary accounts:

Online Fund Transfer
Mobile Banking
Public Provident Fund
National Pension System
Mobile Banking
Easier Loans
Investment Services
General Insurances

Pros and Cons of Corporate Salary Account

Pros: It is a zero-balance savings account. You will get all the benefits of such accounts in salary accounts. If you have a good credit or transaction history in your salary account, it results in banks offering easy loans.

Cons: It pays less interest than certificates of deposit, Treasury bills, or investments. Some corporate savings accounts require minimum balances as well.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: 0

Banks Offering the Account: Andhra Bank, Allahabad Bank, Bank of Baroda, Central Bank of India, Bank of India, Canara Bank, Bank of Maharashtra, State Bank of India, and Corporation Bank.

8. Joint Saving Account

A joint savings account is a special account type where two or more persons open a savings account jointly to meet their banking needs. It is a normal savings account with two or more people operating together.

Features of Joint Savings Accounts

The following are the features of a joint savings account:

Easy financial management
Control over household budgets
Transparent (Helps married couples to share a part of their income in one account)
Easy Operation (In case of the death of a partner, the other one can easily operate the account)

Pros and Cons of Joint Savings Accounts

Pros: Ease of bill payment, simpler legal process, transparent expenses and a sense of togetherness are some of the most important advantages of a joint savings account.

Cons: Some of the biggest cons of joint savings accounts are lack of control, the burden of the other partner's debt, lack of privacy and issues in case of divorce or any other type of relationship termination.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: ₹10000 (depends on bank)

Banks Offering the Account: Ujjivan Small Finance Bank, Yes Bank, Kotak Mahindra, RBL Bank, DBS Bank and IDFC First Bank offer great features with their joint accounts.

9. Pensioners Savings Bank Account

It is one of the most essential savings accounts for pension holders and people aged 60 or above. Some banks offer higher interest rates on your savings or pension. These bank accounts have many features and privileges that create a stress-free post-retirement life.

Features of Pensioners Savings Bank Account

Here is a list of features you can avail from the pensioner's savings bank account:

Safety and Security of the Money
Zero Balance Account
Enhanced Banking Benefits
Bank Easy with Debit Card
Personal Accident Insurance Cover
High ATM Withdrawal Limit
Lost Card Liability & Purchase Protection Liability
Transferable From One Bank/Branch to Another

Pros and Cons of Pensioners Savings Bank Account

Pros: Low risk and higher interest rates are some of the major advantages of a pensioner's savings bank account. Other than that, it creates a good habit of regularly saving money even after retirement.

Cons: Some banks restrict the monthly deposit amount and the number of times you can deposit. Some of them even charge penalties for withdrawals. These are the biggest disadvantages of pensioners' savings accounts.

Interest Rates: 8.20% per annum

Minimum Balance Requirements: 0

Banks Offering the Account: SBI, ICICI Bank, Axis Bank, Bank of Baroda, IDBI Bank, HDFC Bank, PNB, Bank of India and Kotak Mahindra Bank are some of the best banks to open a pensioner's savings accounts.

10. Savings Account for Central/State Govt. Employees

It is a type of savings account that is specifically designed for Central/State Govt. Employees. These savings accounts provide an attractive range of benefits. Savings account for Central/State Govt. Employees offer incredible interest yield along with safety and security.

Features of a Savings Account for Central/State Govt. Employees

Here is a list of the most important features to be availed with the savings account for central/state Govt. employees:

Zero Balance Savings Account
Unlimited ATM Transactions Across the Country.
Credit Card Facility
Free-of-charge Demand Drafts, Multicity Cheques, and Regular SMS Alerts.
Discount on Lockers.
No Annual Maintenance Charge on Debit Cards
Home Loans, Auto Loans, Education Loans, and Personal Loans with Lower Interest Rates.
Discount on Loan Processing Fees.
Higher Rate of Interest on Deposits
Obtain an Overdraft for up to 2 Months' Net Monthly Income.
Avail Several Offers, Including Loyalty Points Through the Banks' Rewards Programme.
Complimentary Personal Accidents Insurance Covers

Pros and Cons of the Savings Account for Central/State Govt. Employees

Pros: The Savings Account for Central/State Govt. Employees generally offer better interest yield than regular savings accounts. They also offer significantly better tax benefits for all account holders.

Cons: The most significant cons of these types of savings accounts are some regulations regarding schemes, limited withdrawal and lock-in periods.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: 0

Banks Offering the Account: SBI, Bank of Baroda, IDBI Bank, ICICI Bank, Bank of India, Axis Bank, Kotak Mahindra Bank, PNB, and HDFC Bank are some of the best banks to open a pensioner's savings accounts.

11. Savings Account for Defense Personnel

Savings Account for Defense Personnel is a savings bank account designed exclusively for Defence Personnel like the Indian Navy, Indian Army and Indian Air Force. These savings accounts are zero balance savings accounts that offer many benefits and essential insurance covers.

Features of the Savings Account for Defense Personnel

Here are all the features of savings account for defence personnel:

Zero Balance Savings Account
Free Unlimited Transactions Across ATMs of Any Banks
Complimentary Personal Accident Insurance Cover
Complimentary Air Accident Insurance Cover
Complimentary Personal Accident Total Disablement Cover
Complimentary Personal Accident Cover
Instant Approval on Personal Loans, Home loans, Car Loans and Education loans
Waivers and Discounts on Processing Fees of Credit Cards and Loans
Discounts on Annual Locker Rent

Pros and Cons of the Savings Account for Defense Personnel

Pros: Important insurance covers, unlimited free transactions and other benefits are the biggest advantages of savings accounts for Defense Personnel.

Cons: The savings account for Defense Personnel does not offer interest rates that can compete with other investment options.

Interest Rates: 2.5% to 7% per annum

Minimum Balance Requirements: 0

Banks Offering the Account: Bank of Baroda, SBI, HDFC, IDFC First Bank, Indian Bank, ICICI Bank, Axis Bank, Union Bank of India and Punjab National Bank offer some of the best savings accounts.

There are various types of savings accounts; visit your nearest bank and open a savings account based on your needs. Always check with the bank if you are eligible for special schemes while opening a savings account.

FAQs About Types of Savings Accounts

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Is it possible to open a savings account without a PAN card?

No, providing the PAN card with the application form to open a savings account is mandatory. If you do not possess a PAN card, you need to fill up Form 60 with the application form and mention the reason for not having a PAN card.

How does the interest get credited to the savings account?

The interest of a savings account is calculated based on the balance available in the account. The interest is calculated periodically. It can be monthly, quarterly or yearly based on the bank's structure.

Is the savings account interest taxable?

Yes, the interest earned from the savings account is taxable. According to Section 80TTA of the Income Tax Act of 1961, interest earnings up to ₹10000 are tax-free. Any higher amount earned as interest from a savings account is subjected to a TDS deduction.