You and your spouse has the savings account in the same bank. You also planning to open another account for your son in the same bank. DO you know that, all the savings bank account in the same bank can be clubbed together into the single customers id for the easy access for the family?. There are many advantages of clubbing all the savings accounts like less transaction charges, reduced minimum balance maintenance, transfer money within family member account, etc. This article explores some of the valid points on clubbing the savings account of the family members. If you have any doubts, please post it in the comments section. If you want to receive the updates through your email, please subscribe here.

Good read: Invest Your Money (Stocks, Funds, Gold, Property)

Who can club the account?

Only family members can club the savings bank account. There are limited type of relations can use this facility, the following are some of the examples which are most commonly allowed by the banks.

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• Parents
• in-laws
• Spouses
• Siblings
• Grandparents
• Children
• Grandchildren

Note that the restrictions are differ from each bank. Also it may vary based on the account type. The accounts can be clubbed even if the accounts are held in the

• Different branches
• Different cities
• Non resident (some banks)

These account will be given a common used it to perform any transactions. The person who is given as the primary account holder’s user id will be used as the common user id.

• How to better utilze the savings bank account?
• Savings Bank interest rates deregulated
• What is auto-sweep facility in savings bank account?

Benefits of group savings account

There are plenty of advantages on group savings account.

1. One of the main advantage is flexibility on maintaining the minimum balance on your savings bank account. If you have three account clubbed together into a single id, the minimum balance maintained will be maximum minimum balance on the three accounts. For example, one account has the minimum balance requirement of Rs. 5000 and another has the Rs. 25000, all accounts put together would be Rs. 25000. The penalty on non-maintenance of minimum balance will be for Rs. 25000 including of all the accounts.
2. Facility to sweep from one account to another account in the same group. In cases where if the balance of one specific account goes below certain level, take it from the another account. If you are submitting the cheque for clearing, if that account is not having the enough balance, it will be deducted from the another account.
3. If you are maintain the group accounts, some banks offer good discounts on using the debit card, etc.
4. Even though all the accounts has the common user id, each account will be maintained with privacy. All the account holders will be getting the transactions on their own account.

Restrictions

As already mentioned in the article, not all the banks treat clubbing of accounts in the same manner. Each banks has their own restrictions to clubbing of accounts. Take example, ICICI bank allows customers can club into Savings Family group account, regular savings account, life plus senior citizen, young star, advantage women. Also some banks may not allow the salary account for adding into the group accounts.

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Summary

This article explains in detail about clubbing of multiple savings account into a single user id for same family members. There are lot of benefits on doing that with some limited restrictions. This would be very useful for those maintain the different accounts in the same banks which will be very difficult to operate with different customer ids. If you are already using this feature, please share your experience with us. If you want to receive future articles from us, please subscribe here.

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Finance Ministry is working on providing the savings account number portability for the bank customers. Customers of a bank can open account in another bank without changing their bank account numbers. It is very much similar to the mobile number portability. If this feature is implemented in India, unhappy customers can easily switch to another bank. The ultimate benefit would be for the bank customers to get the better service. But, there are lot of challenges on implementing the savings account number portability in our country.

Do you want to change banks?

In the current scenario, people find it difficult to change their bank account only because of the tedious paper work. There is no uniform formalities across the banks in India. To avoid that, people don’t think of changing their bank accounts. But, after the savings bank interest rates deregulation, many banks offering the 6-7% interest rates for the savings bank account. It tempts the people for changing their bank account for higher interest rates.

When you are changing your bank using the savings account number portability, there are not much paper work. When you are opening a bank account, you have to submit the Know Your Customers (KYC)  form to the bank which has all the mandatory documents needed for a bank. If you are changing your bank, this KYC norms will take care of moving to another bank. You need not submit all the documents once again to the new bank.

What are the implementation challenges?

The idea of savings account number portability is looking good, but the practical implementation of this idea is not that simple for the banks. It may take years to complete the implementation. As of now, banks are using their own number of digits for the account numbers and they have the own understanding of the formats like first three numbers for branch code, etc. All the banks in India must have to be changed to the single format of the account number.

Technical Difficulty- This implementation has to be updated in their computerized network. In the current scenario, most of the banks has already moved to the e-banking concept and they are managing everything in their computer server. The upgrade of the current systems to the new format would tale more time and expenses. Also not all the banks would implement in the same pace. Normally private banks may implement it very fast and nationalized banks would take more time for these changes.

But RBI is of the view that portability would be easy to implement once a customer is in the possession of a number given by the Unique Identification Authority of India (UIAI).

What is your opinion? Do you thing savings account number portability is must for Indian customers? Please share your thoughts.

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In my earlier posts I have informed the readers that the deregulation of the savings banks account is in the progress. The intention of setting the savings bank interest rates by the banks itself would intensify the competition among the banks and the interest rates would go up. It will be beneficial to the customers. In this article I will write about the prior changes on the interest rates and what is the current situation after the changes announced by RBI. Subscribe to our future articles here.

• How to better utilze the savings bank account?
• Savings Bank Account interest rates derugulation:RBI
• What is auto-sweep facility in savings bank account?
• Banks to give more interest on Savings Bank accounts

History of Savings Bank Interest Rates

• Prior to this change, banks must pay the 4.0% interest for all their savings bank customers. This is same for all the banks. It means that interest rates for the savings bank accounts are regulated by the Reserve Bank of India (RBI) and banks must follow that. This change happened only less than a year.
• The interest rate for the savings bank account was 3.5% for long time and recently only it has been increased to the 4.0%. Also, there was changes in the how the interest rates are calculated. First 10 days of the balance will not be taken for the calculation, also in the remaining days only the minimum balance will be taken for the interest rates calculation. This would result in very less benefit to the customers.
• Prior to making 4.0%, RBI has changed to the daily balance calculation for interest rates of 3.5%.

Deregulation of interest rates

• Effective 25 October, RBI has explicitly sent notification to the banks for changing their savings bank interest rates. Simply, banks are free t0 set their interest rates for their customers. Till now they are compulsory to pay 4.0%.
• The RBI has told banks to pay a uniform rate to all customers having savings account balance of up to Rs 1 lakh. For balances above Rs 1 lakh, banks are free to choose interest rate bands.
• This would benefit the salary bank account holders who maintain the lump sum amount in the saving bank account.

Updated interest rates by banks

However, not all the banks would increase the interest rates immediately. India’s largest bank State bank of India (SBI) has announced that they would not revise the interest rates immediately and it would affect the profitability of the bank. The following are the few banks that has revised the interest rates:

Kodak Mahindra Bank, Yes Bank and IndusInd Bank has set the interest rates as 6% per annum for balances above R1 lakh and 5.5% for deposits less than Rs 1 lakh.

Summary

It is good move by RBI to benefit the customers. Another problem would arise is, banks would start feeling the more expenses and would increase the fees for other services. As per the record, thousands of crores are lying on the savings bank account, now banks has to pay the extra interest for that money. It would result in the more expenses for the bank. However, it is good for the customers to choose the bank which is offering the good interest rates.

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Have you ever inquired about the suitable bank account from your banker? or ever had a thought on multiple savings bank options.   It is very rare or lack of knowledge on the different savings bank account options to the customers. Without considering their needs everyone open the normal savings banks account.  But, the fact is that every bank has multiple savings bank accounts based on the customer needs. How many transactions per month? Do you have outstanding check deposits to your account? Do you need debit card?. The above questions are the few sample questions which determines your savings bank account category. This article exposes the various categories with the banks and how it will help you in saving the bucks. If you have any thoughts, please post it in the comments section. Subscribe to our future articles here.

What is No Frills Savings Bank account?

• Savings Bank interest rates deregulated
• What is auto-sweep facility in savings bank account?
• Savings Account number Portability

This is one of the basic savings bank account with all the banks. As we know that all the banks impose the minimum Average Quarterly Balance (AQB), no frills account don’t have the AQB requirement. You can open this account with the free of cost. The reason behind this account is, banks want to reach out to more customers who need only the very basic requirements of the banking. It is simple account and doesn’t have any extra features. Basically the features are different from each banks. For example, few banks offer the advanced feature in no frills account to lure the customers from other banks. But, to open this account there may be any restrictions like annual income of the application. For example, HDFC bank says has an annual income of less than or equal to Rs. 50,000 to open no frills account.

Average Quarterly Balanace (AQB)

It is one of the basic requirements imposed by the banks to the customers. If you are opening the savings bank account, you must keep track of the minimum balance to avoid any penalties. The penalty amount imposed by the private banks are very high compared to the nationalized banks. The AQB is derived from adding the closing day balance of all the days in the quarter and divided by the number of days in the quarter.  The formula looks like:

For example, HDFC and ICICI banks charges Rs.750 for the non-maintenance of the AQB.

Choose the right option for you

Every bank provides the number of savings bank options to the customers. If you want to take better account for your needs, please spend some tom in evaluating the pros and cons of the each account. As I have mentioned in the above section, no frills account has basic facilities and it would not be suitable for those who are willing to do the multiple transactions. If you walk into the HDFC bank for opening a savings bank account, you must go through the following options:

• Regular
• Savings Max
• No Frills
• Pension Savings
• Family Savings
• Kids Advantage
• Senior Citizen

If you are reading out the above list, the name itself give the purpose of the account. Each type of account is designed keeping in mind with the specific category of people. Next time, when you are planning to open a savings bank account, read the options and choose the best one.

Auto Sweep Facility

In my previous article I have explained about the auto sweep facility with the savings bank accounts. It is one of the notable feature which will utilize the excess amount lying in the saving bank account.

Summary

This article would have provided the basic idea on choosing the right savings bank account for your needs. Note that this explanation would benefit some people who are looking for the restricted features. Most of the customers would be satisfied with the regular savings bank account. It provide the basic features one needs for the daily activities. If you have opened any specific account type, please share with us in the comments section.

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Are you busy and not having enough time to effectively utilize the idle money in the savings bank account?. Then, this article would provide you a useful tips to utilize the auto-sweep facility available  in most of the banks to maximize the returns for your idle money. This article explains about the auto-sweep facility and pros and cons of that feature. This would be perfect for the person with busy schedule and not able use the fund sitting in the savings bank account. If you have any doubts, please post it in the comments section. Subscribe to our future articles here.

What is auto-sweep facility in savings bank account?

Auto sweep facility combines the benefit of savings bank account and fixed deposit account. It is normal case where most of the people have huge amount in the savings bank account for the long time which earns meagerly 4% p.a. The intention or benefit of this facility is to attain the high degree of liquidity in your savings bank account with maximum returns.

This facility has the threshold amount of certain limit, if you have the excess of the threshold  amount in the account, this facility automatically move the excess amount into the fixed deposit.  It earns the highest interest rates then in the savings bank account. Auto Sweep is the common term used to mention this scheme, but different banks has different scheme which you can read out in the next section.

What is Super Saver and Sweep-In Facility by HDFC Bank?

How it works?

If you have a savings bank account and the cut-off amount for the auto sweep is set as Rs.25000, when you have excess amount in the account, it will be moved to the fixed deposit with the higher interest rates. The feature of this facility is different from each bank and cut-off amount also will be different. There may be minimum sweep amount will be specified in the some banks.  The following are the steps explaining how it works:

1. You have savings or current account.
2. This account must be enabled with the auto sweep facility. Note that the name of the scheme is different for each bank. The following are the list of scheme names for few banks:
   1. Axis Bank – Encash 24
   2. Axis Bank – Encash 24
   3. Union Bank – Union Flexi Deposit
   4. HDFC Bank – Super Saver Facility
   5. Bank of India – BOI Savings Plus Scheme
   6. Oriental Bank of Commerce – Flexi Fixed Deposit Scheme
   7. State Bank of India – Multi Option Deposit Scheme
   8. Allahabad Bank – Flexi-fix Deposit
   9. Bank of Maharashtra – Mixie Deposit Scheme
   10. Corporation Bank – Money Flex
   11. United Bank of India – United Bonanza Savings Scheme
   12. IDBI Bank – Sweep-in Savings Account
3. Each bank has their won threshold amount to enable the auto sweep facility.
4. The tenure of the fixed deposit booked would be different from each bank. For example, SBI allows the fixed deposit from 1-5 years where as AXIS bank allows maximum of 181 days.
5. If the savings account lacks of the minimum balance after withdrawing the money or lack of money to clear any cheques, the fixed deposit will be broken and move the fund to savings bank.

Advantages of auto sweep facility

• You need not worry on idle cash on the savings bank account.
• Amount in savings bank will be effectively utilized to earn more income.
• Banks automatically park the amount to high interest rates.
• This would be very good option for those who do very less transaction in the savings bank and have the excess amount.

Dis Advantages of auto sweep facility

• There may be service charges applicable to the transactions. Before opening the auto sweep facility, read the instructions carefully.
• This facility will not be suitable for those who do lot of transactions in the savings account.
• When you have multiple FDs created, the order of breaking the FDs might affect the returns. Few banks first break the low earning FDs then will move to the high interest rates.

Summary

Auto Sweep facility is must have for the account holders who have the excess amount in the savings bank account for long time. It is observed that huge number of professionals who are salaried get their monthly salary on their savings bank account. But, they left un-utilized  for the months which kept idle. This facility will benefit you lot to earn higher interest rates. If you have any doubts, please post it in the comments section.

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In this article I will be writing about the different types of Non-Resident Indian(NRI) bank accounts and services. It is the most common query which I receive from our readers. So, I planned to write down one article explaining the details about the NRI bank accounts. I hope this article will be useful for who want to open the NRI accounts. If you have any doubts please post it in the comments section. Subscribe to our future articles here.

Types of NRI Bank accounts

There are many types of NRI banks accounts available. But, here I will be explaining only the most widely used and offered by the leading banks in India. The following are the three types of NRI bank accounts offered by most of the bank across India:

• NRE Savings/Fixed Deposit Account
• NRO Savings Fixed Deposit Account
• FCNR Fixed Deposit Account

In the following section I will look into the features and benefits of the each account in details. If I miss out any thing, please post it in the comments section.

also read:

• How NRI’s can invest in Indian share market?
• Invest in Share Market and Mutual Funds
• Book Review : 51 Income Tax Tips for Investors

NRE Savings/Fixed Deposit Account

The Non Resident External (NRE) Savings Account is meant for Indians residing abroad. It allows you to transfer foreign earnings easily to India.The following are the few important points regarding the NRE account.

• NRE account can be opened as Savings and Fixed deposit accounts.
• There is no tax on interest earned from these accounts. Also there is no wealth tax.
• That the above tax exemptions are available only for an NRE Account held by an individual and not for those maintained by OCBs (Overseas Company Bodies)
• The currency maintained in this account is Indian Rupee.
• Can open Joint account with any Non-Resident Indian. Cannot open Joint account with Indian Resident .
• You can easily transfer money to India.
• Nomination is allowed in NRE Accounts.
• Can not deposit Indian Currency in to this account.

NRO Savings Fixed Deposit Account

The following are the key points on NRO account.

• NRO account can be opened as the Savings or Fixed Deposit account.
• Currency maintained in this account is Indian Rupee.
• Can open this account with any Indian Resident.
• Interest earned in this account is 30% taxable and surcharge and education cess will be included. It is applicable for both savings and fixed deposit accounts.
• You can use this account to pay any bill and expenses in India.
• Enjoy the convenience of banking at any of our branches in India.
• Nomination is allowed in NRO Accounts.
• Can deposit Indian Currency in to this account.

FCNR Fixed Deposit Account

The following are the key points for Foreign Currency Non-Resident (FCNR) Fixed Deposit bank account:

• Earn Indian Interest Rates on your Foreign Currency deposits with our Foreign Currency Non-Resident Fixed Deposit.
• The entire deposit (principal and interest) is exempt from tax
• Open the deposit jointly with any other NRI
• Get an overdraft on your Savings / Current account against your FCNR Fixed Deposit
• Nomination Facility available
• Joint accounts with Indian Residents not allowed.
• Following currencies are allowed in this account:
  • US Dollars
  • Pounds Sterling
  • Euro
  • Japanese Yen
  • Australian Dollars
  • Canadian Dollars
• Can not deposit Indian Currency in this account.
• Minimum 1 year and maximum 5 years is allowed.

Summary

I hope this article will be more useful who are interested in opening the NRI bank accounts. If I have missed out any of the important aspect of the topic, please post it in the comments section. I know many of our readers are NRI and they already hold the NRI bank account. Please post your experience and thoughts on the NRI accounts. Thank you for reading this article. Soon, I will coming up with many NRI related articles. keep reading our articles.

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Introduction

In this article I will be writing about the online banking systems in India and the features available with different banks across India. If you look into the modern age of banking , online banks or net banking made things much easier for the people and saves lot of time. The traditional way of standing in the queue and filling up all the forms, now its no hassle for making any transaction with the banks. Every bank has their own features and some banks still not having the more advanced features like transferring money to any banks across India, easy registration for net banking, etc. This article will explore the features with different banks and coming with the series of articles. This is part 1 in the series of article about the Online Banking in India. I would like to hear feedback from the user and your experience on online banking in your bank account. Please post it in the comments section. You can subscribe to our future articles here.

Advantage of Internet Banking Facility

Advantages previously held by large financial institutions have shrunk considerably. The Internet has leveled the playing field and afforded open access to customers in the global marketplace. Internet banking is a cost-effective delivery channel for financial institutions. Consumers are embracing the many benefits of Internet banking. Access to one’s accounts at anytime and from any location via the World Wide Web is a convenience unknown a short time ago. Thus, a bank’s Internet presence transforms from ‘brouchreware’ status to ‘Internet banking’ status once the bank goes through a technology integration effort to enable the customer to access information about his or her specific account relationship. The six primary drivers of Internet banking includes, in order of primacy are:

• Improve customer access
• Facilitate the offering of more services
• Increase customer loyalty
• Attract new customers
• Provide services offered by competitors
• Reduce customer attrition

Banks with Internet Banking

In the current scenario, every bank in India has the internet banking facility. Recently the banks are extending their presence in rural areas to lure more customers and show them the advantages of internet making by educating into the new system. This gives the countries entire population to get the benefit of technology advancement. As I said, still it is evolving and not all the banks provide very advanced features. In our article I will take few leading banks and explain the features they are offering.  Note that, the online banking can be for managing your Savings Accounts, Credit Cards, Fixed Deposit, Insurance, etc. The following are the list of banks and their online website address.

• ICICI Net Banking
• HDFC Net Banking
• SBI Cards
• LIC India
• CitiBank Login

Summary

This article presents only the basic idea on internet banking in India. Also the leading internet banking portals mostly used by the customers. When it comes to the internet banking, internet security on net banking is the challenging problem to be faced by all the major portals. Every customer must aware of the security issues and protect their details from the hackers. In my next article I will be writing about the security issues which normally cheat customers and steal the personal details. Thank you for reading this article. Please post your feedback on the comments section.

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