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Have a savings account? Banking terms you should know

Do you have a savings account? Or are you planning to open a digital savings account online? If yes, then knowing these savings account terms can help you understand the different aspects associated with banking and use your online savings account seamlessly.  

Account number:

Banks assign different account numbers to different account holders. All savings account holder has a unique account number that helps to identify the account holder. 

To make it easier for the bank officials, banks have different codes for distinct branches. The bank account number usually comprises 11 to 16 digits. Banks have their own account numbering pattern. 

You can find your account number on your welcome kit or in the profile section of your mobile banking app

Many private sector banks such as IndusInd Bank allow customers to choose their account number based on their birthday or any other important dates. Banks do not charge any fee for this service. 

IFSC (Indian Financial System Code)

If you are planning to transfer money through NEFT or IMPS, you will need their bank’s Indian Financial System Code or IFSC.   

It is an 11-digit alphanumeric code, and it comprises bank code and branch code. The first 4 digits are the bank code and the last 6 digits are the branch code followed by a zero. Banks print IFS code on the chequebook and on the first page of passbook of every customer. 

You can click here to find the IFSC of any bank.  

Debit card number 

Debit card number is a 16-digit number that is printed on the front of your debit card. Every customer gets a unique debit card number.  

Here’s what your debit card digits mean:  

The first six digits of your Debit Card number represent the debit card’s Issuer Identification Number. It shows whether it is a Mastercard, VISA, RuPay card.

The next few digits show your bank account details such as the name of the bank, type of card, etc. 

You may have to add your debit card number while shopping online. The debit card number of your virtual debit card is present in the debit card section of your mobile banking app. 

CVV number 

Card verification number or CVV is a three-digit number present at the back of the card. It is present near the signature strip. The CVV number is required to complete any online transaction as it proves that you hold the debit card. 

Virtual debit cards also have CVV number available with the virtual debit card. You may have to tap on ‘Show CVV’ on your card.  

However, never add your PIN when you are providing your CVV. 

Rate of interest

Every bank offers a rate of interest to their savings account customers. Based on the individual’s bank balance, different banks offer a different rate of interest. This means that banks may offer a different rate of interest to a customer who has more than Rs.1 lakh as balance and a customer who less than Rs.1 lakh in the savings account.   

Depending to the Reserve Bank of India’s repo rate, banks revise the rate of interest from time to time.  

Minimum average balance

Depending on the savings account, you may have to keep a certain minimum average balance in your account on a monthly or quarterly basis. You may have to pay a penalty for not maintaining the minimum average balance. Banks calculate minimum average balance on daily closing balances.  

There are zero balance savings accounts with no minimum balance while accounts for HNIs can have more than Rs.1 lakh minimum average balance.  

Know Your Customer (KYC) 

RBI has mandated banks to carry KYC process of their existing customers and new customers. The aim of KYC is to control money laundering and other fraudulent activities. If you are planning to open an online saving account, complete the full KYC process to use the account with no limitations. To complete the full KYC procedure, you can book an appointment through your mobile number, call the customer care or visit the nearest bank branch. 

Conclusion: 

Savings account is one of the basic financial product. These were some basic terms associated with savings accounts that you should know.   

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