Opening a bank account is an essential and getting one is pretty simple.
If you don’t have one yet, its time you open one ASAP. Don’t worry you don’t have to sweat it out in a long queue at the bank, with the internet 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. 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 an 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 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.
Apart from current and a savings account, there are other types of bank account too:
However now there are better options than fixed deposits and recurring deposits if you wish to invest your money to grow it. For e.g. Mutual Funds. FD’s and RD’s are mostly for saving.
Opening a bank account is just like opening an email account or a social media account, here’s how:
1. Both have an 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. Though some banks provide special accounts for children above 10 to open a bank account. Apart from the age limit for opening a savings bank account you need these:
Proof of identity (passport)
Proof of address (telephone or electricity bill)
Copy of visa and residential permit
PAN card (income tax 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 for e.g. Yahoo or Gmail or Hotmail depending on your needs. Just like that before opening a bank account, you should choose your bank carefully. Consider and compare interest rates, services that are offered, minimum deposit required 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 providing 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 minimum balance to be maintained in the account. 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 opening 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 an open it today!