Private sector banks cut rates for savings deposits

Having improved their ratio of low-cost current and savings accounts (CASA) in the past six years, new age private sector banks are now rationalising their deposit rates by steadily raising their deposit slabs, which is likely to help them improve margins from here on. IndusInd Bank, Yes Bank and Kotak Mahindra Bank have either fully or partially tweaked their savings rates since September after seeing a sharp rise in CASA ratio since the RBI allowed banks to set their own savings rate in October 2011. 

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After SBI, Bank of Baroda cuts interest rates on savings accounts

Within days of SBI slashing interest rate on savings bank account, another PSU bank - Bank of Baroda - has followed suit, cutting it to 3.5 per cent on deposits of up to Rs. 50 lakh.

"We wish to inform you that it has been decided to introduce a 2-tier savings bank interest rate (from) August 5...," the bank said in a regulatory filing. Effective from Saturday, the interest rate on savings bank balance of up to Rs. 50 lakh has been reduced to 3.5 per cent from the current annual 4 per cent.

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How to activate Dormant Bank Account

Do you have more than two bank accounts but do not use them often? If yes, then you must ensure that you either reactivate or close the account. As per the Reserve Bank of India guidelines, any savings account or current account which has seen no transactions for two years, will be deemed inoperative or dormant. Here are a few tips on how to reactivate your account.

Why does your bank account become inoperative or dormant?

• If there has been no transaction in the account over a one year or more, then it becomes inactive.
• However, if there has been no transaction for two whole years, then the account automatically becomes dormant.
• Only a savings account or current account can become dormant.

How do you know if your account is dormant?

• When you cannot make any transaction through any banking channel, be it ATM/phone/online.
• An inoperative account may not affect your credit history, but to avoid fraud, it is better to reactivate it.
• According to a World Bank report, India accounts for 195 million of the 460 million adults with dormant accounts around the world. At 43 per cent, the rate of dormancy is quite high measures to keep your account active.

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Banks to pay interest rate on saving accounts every quarter: RBI

At present, the interest is credited in savings bank account on half-yearly basis. Interest rate on savings bank account is calculated on daily basis since April 1, 2010.

"Interest on savings deposit shall be credited at quarterly or shorter intervals (on domestic savings deposits)," RBI said in a master circular issued on March 3.

While public sector banks offer 4 percent interest on savings deposit, private players offer as much as 6 percent.

In 2011, the Central Bank had decided to give freedom to commercial banks to fix savings bank deposit rates, the last bastion of the regulated interest-rate regime. While giving banks this freedom, RBI had said a uniform rate will have to be offered on deposits of up to Rs 1 lakh.

On higher amounts, banks are allowed to offer differential rates to depositors.

Earlier, banks used to give interest of 3.5 percent on savings accounts on the basis of the least deposit in an account between the 10th and the last day of each month.

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List of Indian & Overseas Address proof (for NRE/NRO also)

All KYC Documents provided need to be self attested

Please refer table below for acceptable address proofs

Proofs to be submitted in the name of the Primary Applicant. No address proof will be accepted in the name of a Joint Applicant. Address proof is mandatory for both overseas and Indian addresses.

Read Also - Saving Bank Accounts for NRIs-Difference between NRE & NRO Acs-Required Documents

In case your address proof and visa is not in English, please provide a duly notarized translated copy in English.

Valid Proof (Any one)	Criteria of Validity	For India Address Proof	For Overseas Address Proof
1) Passport copy	Valid for at least 3 months from the day it is submitted as address proof.	yes	yes
2) Utility bills (any one from the list below) (a) Electricity bill (b) Gas bill (c) Water bill (d) Landline telephone bill (e) sewage services bill	Issued by a municipal authority  The date of issue of any of these utility bills should be more than three months old from the date of account opening	yes	yes

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Types of Bank Accounts in India (Deposit Accounts)

CURRENT DEPOSITS / ACCOUNTS

SAVING BANK / Saving Fund  DEPOSITS / ACCOUNTS

RECURRING DEPOSITS / ACCOUNTS

FIXED DEPOSITS / ACCOUNTS OR TERM DEPOSITS

 

Traditionally banks in India have four types of deposit accounts, namely Current Accounts, Saving Banking Accounts, Recurring Deposits and, Fixed Deposits.   However, in recent years, due to ever increasing competition, some banks have introduced new products, which combine the features of above two or more types of deposit accounts.  These are known by different names in different banks, e.g 2-in-1 deposits, Smart Deposits, Power Saving Deposits, Automatic Sweep Deposits etc.  

What is  a Current Account ?  Who uses current accounts? 

Current Accounts are basically meant for businessmen and are never used for the purpose of investment or savings.  These deposits are the most liquid deposits and there are no limits for number of transactions or the amount of transactions in a day.  Most of the current account are opened in the names of firm / company accounts.   Cheque book facility is provided and the account holder can deposit all types of the cheques and drafts in their name or endorsed in their favour by third parties.  No interest is paid by banks  on these accounts.  On the other hand, banks charges certain  service charges, on such accounts.   

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Documents to open Saving Account in Bank

For opening a new savings account, you have to submit following documents:

1. Recent Passport Size Photographs

2. Any Form of Identity Proof : Following documents are acceptable as valid Identity Proofs

– Aadhar card

– Passport

– PAN card

– Voter’s identity card

– Driving license

– Any form of identity card (College ID card, employee identify card etc)

– Letter from a recognized public authority or public servant to verify the identity

3. Proof of Address : Following documents are acceptable as valid address proofs

– Telephone Bill (BSNL or MTNL bill. Some banks may not accept private operators bills)

– Letter from a recognized public authority or public servant verifying the residence of the customer

– Electricity bill

– Ration card

– Letter from employer

Exact documentation will vary between banks

List of Documents

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Conversion of Salary A/c to SB Plus A/c

Conversion of Salary A/c to SB Plus A/c:-

Hand out of SB plus

Minimum deposit in SB account is Rs. 25000/-, sweep out in Rs. 5000/-.

First step - take application from customer, then take 15g/15h as applicable and also if customer require it (because interest is taxable), modify CUMM.

VERIFY it.

Second step - Go to ACM, in 'S' option do sweep balance Rs. 25000/-

after that go to option '4' do F4, choose TD581,

sweep out 'Y', renewal as asked by customer, it can be 7 days to 10 years (rate of interest date started).

personal request more than 1 yr not to be advised then customer will not see interest reflects in SB passbook.

Then put ledger folio as sl no of SB plus customer, operation instruction, city code etc, and then F4 and F10.

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