In one of our earlier posts, we have discussed some digital savings accounts that you can open online from the comfort of your home. Click here to read the article.
Digital savings account or online savings account differs from regular savings account. Online savings account is a new generation savings account. Customers can open these accounts instantly through your smartphone or computer.
Today, we will examine the differences between the online savings accounts and ordinary savings account.
With a digital savings account, you can forget about visiting the bank branch or filing up paper forms. Customers can open digital savings accounts online by opening the bank’s site or by downloading the mobile banking app. All you need to do is fill your personal details and carry out the Aadhaar OTP verification. Open the bank account within minutes, and start transacting instantly.
As the name suggests, zero balance accounts don’t have any minimum average balance requirement. This means that unlike regular savings account, where you have to maintain a minimum average balance, you don’t have to pay any penalty for keeping your account empty. Kotak 811, Axis ASAP, digisavings are few zero balance accounts.
RBL Bank’s digital account has a minimum average balance requirement of Rs.10,000 that banks waive off if you open an Recurring Account or Systematic Investment Plan of at least Rs.2000.
Similarly, ICICI Bank’s Insta Save account has a minimum average balance of Rs.10,000. Customers can open a minimum one year FD of Rs.10,000 to make it a zero balance account.
Digital savings account holders get a free virtual debit card after the account is opened. Individuals can access their virtual debit from the mobile banking app. It is an online version of a normal physical debit card. You can use the virtual debit card to shop online and pay your utility bills.
Virtual debit cards are safer than physical debit card as there is no risk of someone stealing your debit card.
You can also opt for a physical debit card that will allow you to withdraw cash and swipe your card at PoS. Physical debit cards are not the default options for most digital bank accounts. Customers have to request for the physical debit card through their mobile banking app, net banking or by calling the customer care.
Keep in mind that physical debit cards have issuance fees and an annual fees that it will vary across banks.
Customers who don’t have any existing relationship with the bank can open digital savings accounts. It means individuals who hold a savings account or have taken a loan in the past, cannot open these accounts.
Anyone can open a regular savings account with any bank.
Individuals above 18 years of age living in India can open an online savings account. Minors and NRIs can’t open these accounts. Customers have to visit their nearest bank branch to open students/kids savings accounts or NRI account.
Individuals opening digital accounts should complete the full KYC process within 12 months after account opening. Failing to do so can lead to account freeze. Account holders can simply complete the KYC process by booking an appointment or visiting the nearest bank branch. Biometric authentication process makes it possible to complete the KYC process within seconds.
After the full KYC process, people can transact and spend with no restrictions. In a limited KYC account where the full KYC process is not completed, individuals can’t have more than Rs.1 lakh at any point. Also, banks cap the total transactions including spends and deposits at Rs.2 lakh.
Digital savings account is a savings account. However, it varies from a regular savings account. Instant account opening, virtual debit card, full KYC, eligibility requirements are some aspects that differentiates online savings account from a normal savings account.
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