Remember those days when it took days to open a savings account. Now, you can apply for a digital account online and open a savings account and carry out all the banking transactions from the comfort of your home or office.
What are digital savings accounts?
A instadigital savings accountare savings account that you can open online after completing the online account opening form available on the bank’s website or by downloading the bank’s official mobile banking app.
It is similar to a regular savings account, and account-holders can benefit from the benefits that the bank offers to their savings account customers.
How to open a digital savings account?
You can apply for digital savings account online, and the process takes hardly a few minutes. Online accounts allow you to open savings account using Aadhaar Card and PAN Card.
While the account opening process may differ from bank to bank, here are a few of the common steps that you may have to go through to open a digital savings account.
- Provide a mobile number that you want to be registered with the bank
- Enter your details such as your PAN and Aadhaar number
- Enter the OTP that you received on your Aadhaar registered mobile number
- Some of your details will be fetched from UIDAI after the Aadhar OTP verification.
- Enter the remaining details such as mother’s name, profession,annual income etc.
- After filling in the required details, you will get an option to set net banking and mobile banking credentials.
After you have completed the required details, you will find your account number along with other details. Keep it handy for future reference. Your instant online savings account is now open.
You have to complete the full KYC process by visiting the nearest bank branch or fixing an in-person verification appointment as banks open a digital saving account through Aadhar OTP verification. Bank representatives will verify your documents or carry out biometric authentication to complete the KYC procedure. After the KYC process is completed, you can use your online savings account without any restrictions.
Features of digital savings accounts
Online account opening process: One of the main benefits of a digital savings account is the online account opening process. The account opening process is entirely online without any paperwork. Moreover, you don’t have to visit the bank branch to open a savings account. However, you might need to visit your nearest bank branch to complete the required KYC process.
Instant account opening: The account opening process of a digital savings account is not only completely paperless but also instant. You need to enter your PAN and Aadhaar number to open digital savings account instantly.RBI has made it possible for banks to open an instant online account through Aadhar OTP verification. So, to open an account instantly online, you need to enter the OTP that you have received on your Aadhaar registered mobile number.
Earn interest: Banks offer specific interest rate to their savings account customers. The interest rate applies to all savings account customers. The interest rate helps you to earn money on your deposits. Customers of digital savings account also receive interest rate on deposits. Savings account interest rate maybe revised from time to time. As a higher interest rate may translate into higher interest income, it would be a good option to compare different digital savings accounts’ interest rate before applying for a digital account.
Debit card: Depending on the bank, customers can avail virtual debit card and physical debit card. Kotak 811 offers free Virtual Debit Card to the customers. You can also apply for a physical debit card at a nominal cost. Moreover, banks may issue VISA, MasterCard or RuPay debit card. While you use VISA and MasterCard for international transactions, you can use RuPay debit card for transactions within India.
Monthly average balance(MAB): Most savings account have a monthly minimum average balance that customers have to maintain every month. Failing to maintain the minimum average balance will lead to penalties. An instant savings account can be a zero balance savings account or it can come with a minimum average balance requirement.Customers don’t have to maintain any minimum average balance in online zero balance savings accounts. Moreover, some banks waive off penalty on non-maintenance of a MAB, if you can open a fixed deposit, recurring deposit or set up a systematic investment plan of a certain amount.
Instant banking services: As a savings account customer, you can avail net banking and mobile banking facilities. With internet banking and mobile banking, you can carry out various banking transactions such as transferring money to friends and relatives, requesting additional cheque book, etc.
Avail savings and investment options: With a digital account, you can save and invest money in just a few clicks. From booking a fixed deposit or setting up a systematic investment plan to invest in mutual funds, it is easyto make your money work for you. However, you have to complete the full KYC process to book an FD or RD etc.
Limitations: As a digital savings account is opened through to Aadhar OTP verification process, RBI has set certain restrictions on the account. However, after the full KYC process, banks remove such restrictions and limitations. The maximum balance, cumulative credits and account validity are the three main limitations of these accounts. A customer cannot hold more than rupees 1 lakh at any point in the account before completing full KYC. Moreover, the accumulated transactions in the account cannot exceed Rs. 2 lakhs in a financial year. In case of a breach, banks might freeze such accounts. Individuals have to visit the nearest bank branch with the required KYC documents to unfreeze their digital savings account.
A digital savings account is valid for 12 months. Accountholders need to complete the full KYC process of the account to continue using the account.
KYC process: As we have seen earlier, it is essential for an instant account saving account holder to complete the full KYC of the account within 12 months. To complete the KYC process, one needs to visit the nearest bank branch or book an appointment for in-person verification of KYC documents. After the full KYC process, one can use the account without any restrictions.
You can open digital savings account online within a few minutes. If you are looking for the best digital savings accounts, it is important to compare the account opening process, minimum average balance and interest rate, among other factors.
