A bank account is a daily essential and a must-have for attaining financial freedom. Most of you might already have one, but chances are that it’s a joint account with your husband or father being the primary holder. In such cases, for every bank transaction, you need to make, you might find yourself running to them to help you out. Earlier, this wasn’t a big deal because most transactions used to happen with cash. But now with lots of transactions happening online, you would be rushing to them for card details, for that OTP on their registered number, for details on your account if someone needs to send you money. The list is endless and can get annoying both for you and them. So, opening your own bank account for performing day to day transactions is very very important especially to attain financial freedom. And since you can have multiple accounts, you don’t need to shut the joint account, you can keep that open and have another one for yourself.
Don’t worry, unlike before you won’t have to sweat it out in a long queue at the bank, you can open one sitting at home just like you open any social media account!
What is a bank account?
A bank account is just like a piggy bank where your money is safe, secure and out of sight so you’re not tempted to blow it all up! They let you deposit your money and perform transactions like paying bills, paying a friend, buying groceries, booking tickets etc. There are different types of accounts that you should know depending upon the type of financial transaction. They are –
1. Current account:
This one is mostly for businesswomen/traders who need to regularly make transactions. The bank does not give any interest on these accounts and you can make unlimited withdrawals and deposits with this account. These accounts also provide an overdraft facility. What does that mean?
Let me explain:
Tina a fashion designer has a current account for all her business requirements like buying fabric, paying her tailor, paying rent for her boutique, depositing advances received from customers etc. She receives a huge order worth Rs. 20 lakhs. For this, she needs to buy fabric worth Rs. 1 lakh but she only has Rs. 90,000 in her current account. So she takes an overdraft of Rs. 10,000 to make her payment and pays interest on the amount she overdrew to the bank.
Overdraft facility is just like a loan with a decent interest rate available at a short notice.
2. Savings account:
This one is commonly used by most of us for our day-to-day banking needs and for us to save our money. They give an interest between 4% to 6 % every month on the amount we deposit. However, there are certain bank rules for cash withdrawals and deposits on these accounts so you cannot misuse it like a current account. Most savings account also have a minimum balance requirement, meaning which to keep the account running you need to have some funds.
Current Vs Savings Account
Apart from current and a savings account, there are other types of bank accounts too
Opening a bank account is just like opening an email account or a social media account
1. Both have Eligibility Criteria:
Just how Facebook needs you to be above 13 to open an account, to open a bank account you need to be above 18 years. If you’re younger than that you can open a joint account with someone.
To open a savings bank account you would need –
- Proof of identity (Passport or Aadhaar card)
- Proof of address (Telephone or electricity bill)
- Copy of visa and residential permit
- PAN card
2. Choosing an appropriate bank is a lot like choosing between Yahoo or Gmail:
How you’d carefully select which account to open an email address on depending on your needs, you should choose your bank carefully. Consider and compare interest rates, services that are offered, minimum deposit required, the location of the bank, proximity to you and your workplace, and the different fees charged before selecting your bank.
3. You need to fill a form for both:
For signing up on a social media platform you need to provide information like your name, gender, display picture etc. Similarly, you need to fill a form for a bank and provide the necessary information.
There are 2 ways to open a bank account in India:
Traditional offline method:
- Visit a bank branch with an original Aadhaar Card, PAN Card, their photocopies and 2 passport size photographs.
- With guidance from a bank executive, fill a form.
- After filling and signing it, submit it along with self-attested photocopies of the above documents
- After 2 days your savings account will be open. Banks will also ask you to deposit some amount of money as a minimum balance. Apart from that they will provide you a passbook and a cheque book. You may ask for ATM/Debit card for this savings account. Some banks provide it for free and some banks charge Rs. 100.
- Visit a bank’s website and select a kind of savings account you wish to open.
- Fill a form online. Here, Aadhaar Card and PAN Card details are required
- Depending on your bank you might or might not have to visit a branch to fulfil certain other formalities like submitting photocopies of documents.
4. Both need some action to function:
After opening a Facebook account or an Instagram account you eagerly post your first picture or change your display picture or update your first status in order to make other people aware of your newly created Facebook account, similarly in the newly created bank account you have to deposit a minimum amount at first so that the account can function.
5. Both come with accessories:
Just how Facebook comes equipped with so many tools like a story feature, a cover album feature, similarly after opening a bank account you will get a passbook, a cheque book, an ATM card and guide to register for Net Banking.
So you see how opening a bank account is a lot like signing up on Facebook. If you haven’t opened yours yet, go open it today!