Operations of an Online Savings Account
How does an online savings account work?
By Team Shepays
2 days ago
With the advancement in technology, the banking and financial services sector has also seen significant changes in the way the industry operates. Today all the operations that require people to visit the banks have started online, allowing users to take advantage of all the services from the comfort of their home without taking the hassle of visiting the branches of their bank.
Moreover, this has also helped the banks in various ways. The banks need not have to spend large amounts expanding their physical presence in several locations. This allows them to reduce the huge costs associated with the traditional brick-and-mortar banks by simply being online. Hence, the savings on costs by these banks are utilised by them in enhancing the online services whereby they provide good interest rates on the savings account and 24*7 support to its users. Also, banks provide some extra efficient and versatile services too. The online presence of banks allows them to attract millennials too.
Nowadays, for opening a savings bank account, a person doesn't need to visit the bank. This service is provided by almost all banks online. This makes the whole process quick and effortless. All a person needs is a mobile or laptop and an internet connection, which today is not difficult to find.
Online Savings Account
The process to open an online savings account is very simple. However, the steps may vary from one bank to another, but a few steps remain the same. Firstly, visit the website of the bank where you want to open the account, fill out the application form with necessary details like name, age, income source, details of employment, residential address, etc. Designate the beneficiaries for the account. Then, complete the Know Your Customer (KYC) process whereby you might have to provide Aadhar details and complete video KYC. Once the account is verified and activated, you can start depositing money.
Eligibility for online savings account
Eligibility for an online savings account is the same as an offline account. One has to meet the eligibility criteria to get started. Two common criteria of almost all banks include:
The age of the person wanting to open a savings account must be at least 18 years, i.e., they must be adults.
The person must be a resident of India. Some banks may also allow foreign nationals staying in India to open an account. NRIs can also open an online savings account.
Advantages of an online savings account
Ease of opening: It is very convenient and easy to open an online account. It can be done through a smartphone within a few minutes. The banks also provide a video KYC option.
Interest rates are higher: Online accounts' interest rates are higher than offline accounts. And sometimes, the interest may vary with the amount in the account. Hence, it is advised to check all the interest rates before selecting a bank.
Lower fees: the online savings account does not require one to keep a minimum balance as against the traditional savings account. You can also open an online account without any opening fees. Since the banks save on various costs by being online as against a brick-and-mortar type, the fees charged by them are also less.
Ease of accessing funds: Online accounts can easily be accessed through portable devices like mobile phones, which makes the transfer of funds via NEFT and IMPS convenient and on the go. The debit cards can be used to withdraw money anytime as well as for shopping and online bill payment.
Access to great deals:by opening an online savings account, one can get access to the offers, rewards, bonuses, discounts, and subscriptions.
Having an online savings account comes with various benefits and is not a difficult task. It helps you keep track of your savings while earning interest on the same, which is better than a traditional savings account. ShePays is launching a digital-first Neo bank. It offers a variety of digital solutions like online money transfers, insurance, investments, bill payments, and many more. They aim at providing a financial learning platform to women through their specialised products like prepaid cards, savings accounts, and business banking.
What is an online savings account?
An online savings account is just like a traditional savings account. However, here you do not have to visit the bank to withdraw or deposit money. It operates completely online. And you do not have to visit a bank to open the account; you just need to visit the website of the bank through your mobile to open the account and follow the steps given.
What are the documents required to open an online savings account?
Though, the documents required may vary from bank to bank. But mostly, one may require an Aadhar card, PAN Card, Driving Licence, Passport, or Voting card. Mainly two of these Aadhar and Pan Card are enough for verification.
What is the minimum balance required to open an online savings account?
For a traditional savings account, one may require to keep a minimum balance in their accounts as suggested by their respective banks. However, no minimum balance is needed for most online savings accounts, but this may again vary from one bank to another.
How do I open an online savings account?
To open an online savings account, you may need to follow these common steps:
  • Visit the bank's website on which you want to open an account.
  • Choose the type of account you may wish to open.
  • Fill out the application form with the required details regarding your name, date of birth, occupation, address, details of the employer (in case of salary account), nominee details, etc.
  • KYC (Know Your Customer) verification - the video KYC service is provided online and takes only a few minutes to complete, whereby your details are verified, and you have to follow the instructions provided.
  • Once verification is done, you may transfer some amount to get your account activated.
What are the eligibility criteria to open an online savings account?
The eligibility criteria are different for different banks, but a few of the common criteria are:
  • You must be an Indian citizen.
  • You must be 18+ years old.
  • You must have a valid Aadhar and PAN card.
  • You must have a valid mobile number linked to your Aadhar.
  • The mobile/desktop used to open the account must have a camera to complete the video KYC process.
Is it important to add a nominee for an online savings account?
It is always advised to have a nominee for the account, as in the case of an unforeseen unfavourable situation, the amount in the account is easily transferred to the nominee.
Blog Summary:
The changes in technology have led to advancement in many sectors like the banking sector. Nowadays, all the services traditionally provided by banks have come online. One such service is the online savings account. Since banks save a lot of costs by being online. This leads to lower costs for the account holders, and these accounts also pay higher interest rates than the traditional savings account. The online savings account can be provided by either online banks or traditional brick-and-mortar banks that operate online too. Opening an online account is not a difficult task, and the account can be opened within minutes.