SB (Savings Bank) accounts help individuals, house-wives, minors and others inculcating a habit of thrift in themselves. The holders of these accounts get various banking facilities from banks while earning some interest on their savings.
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Minors, who have attained 10 years of age.
Trusts, Societies and other organizations approved by RBI.
One of the following as proof of identity and proof of address :
One of the above documents is required to be submitted as proof of identity. If these documents also contain address details, then it would be accepted as as 'proof of address'. If the document submitted does not contain address details, then another officially valid document which contains address details is required to be submitted.
In absence of above noted officially valid documents, a normal account can be opened by submitting a copy of any one of the following documents:
This, however, is not a general rule and it is left to the judgement of the banks to decide whether this simplified procedure can be adopted in respect of any customer.
A 'Small Account' can be opened by submitting recent photograph and putting signature or thumb impression in the presence of the bank official. The small accounts have following limitations:
Small accounts remain operational initially for a period of twelve months and thereafter, for a further period of twelve months, if the holder of such an account provides evidence to the bank of having applied for any of the officially valid documents within twelve months of the opening of such account. The bank will review such account after twenty four months to see if it requires such relaxation.
The Minimum amount varies from bank to bank. The amount also varies in a bank on the location of the branch, type of branch and type of account (with or without cheque book).
Not maintaining the minimum balance invites penalties and may also lead to closure of the account by bank.
Previously, the interest was applied at prevailing rate on the lowest balance available in the account between the 10th and the final day of the month. From 1st April 2010 onwards, the savings bank interest is calculated based on the daily balance method. This means that interest is calculated on the closing balance of the account every day, giving maximum benefits to the depositor.
The interest is credited to accounts at half yearly rests. Some banks have started crediting interest on monthly intervals.
With effect from 1st April 2018 (AY 2019-20) Senior Citizens (i.e. Residents aged 60 years or above) are eligible for exemption of interest income from Bank / Post Office deposits (Saving accounts / Time deposits / RD accounts) upto ₹ 50,000/- under Section 80TTB. (They are, however, not eligible for rebate under section 80TTA.)
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