A Digital savings account is a type of bank account that can be opened and operated entirely online without the need to visit a physical branch. Digital Savings Accounts are typically offered by banks or digital-only banking services and are accessible through a website or mobile app.
It is a well-established fact that traditional banking is time-consuming in this fast-moving world, whereas digital banking is cost-efficient and time-saving. Customers can easily access their accounts from a laptop or a smartphone with internet connectivity.
Many of the same features and advantages of traditional savings accounts are now available with Digital Savings Accounts, such as interest on deposits, cash transfers, chequebook requests, bill payments, and the capacity to make deposits and withdrawals. They might also include extra features like online bill payment, mobile check deposit, and budgeting tools.
If you are someone who is sceptical about opening a Digital Savings Account, then this article is a go-to guide to help you understand everything you should know about it. Before delving into the technicalities, let's discover the advantages of a Digital Savings Account.
Advantages of Digital Savings Account
- Convenience: A Digital Savings Account can be opened and managed entirely online, allowing customers to access their account from anywhere, at any time conveniently.
- Competitive interest rates: Banks may offer competitive interest rates for Digital Savings Accounts, helping customers to grow their savings over time.
- Security: Digital Savings Accounts are typically protected by advanced security measures, including encryption and multi-factor authentication, to prevent unauthorised access.
- Integration with other digital tools: Many Digital Savings Accounts are integrated with other digital tools, such as budgeting apps, to help customers better manage their finances.
Steps To Open A Digital Savings Account
Step 1: Select a Banking Partner
The first step is to research thoroughly to choose a banking partner that will meet all your needs. To do this, you should be clear about all features you are looking for: do you only need a savings account, or do you need an account that will also help you manage your expenses? Invest time in researching your alternatives and then select a banking partner with the most favourable conditions.
Another thing you should be mindful of is the interest rate. Interest rates are directly proportional to the returns you receive, which implies that the higher the interest rates, the larger the returns. So you need to carefully consider the Savings Account interest rates of all the competitors and choose the one that will offer you larger returns. Banks might also charge you for some services like regular service costs, ATM fees, and overdraft fees. Some banks may impose overseas transaction fees, excess transaction fees, and costs for hardcopy statements. These charges vary depending on the bank chosen, so it is important to look for these while choosing.
Step 2: Go To the Bank's Website or Download Their App
Once you've decided on a banking partner, visit their official website or download the app. In most cases, you'll find the option to establish a new online bank account under the 'Products' area of the app or website. Navigate to the appropriate option and select the item to open an account.
Step 3: Complete the Application Form
You may be required to provide basic information in the application form, including your name, date of birth, email address, contact number, and so on. Most bank interfaces are user-friendly to ensure an easy application process.
Step 4: Submit Required Documentation
After you have completed the application form, soft copies of a few documents need to be attached. The list may differ significantly from one bank to the next, but generally, the following will be required.
- Aadhaar card
- Proof of Address
- Proof of Identity
- Form 16
- Passport-size Photo
You may be asked to self-attest a few documents if it is mentioned in the bank requirements. Remember to check the bank's eligibility criteria and ensure they meet the same.
Step 5: Finish the KYC process
KYC stands for Know Your Customer. It is a compulsory requirement that banks follow before enabling you to create an online account. This is done to confirm your identification. Most banks request video KYC to proceed with the account opening procedure.
To do the verification via video KYC, a bank employee will contact you through a video call. You'll be asked for certain information which needs to be provided to complete the process. After some time, your application will be approved, and you can begin using your account.
6: Begin Banking!
The approval of your KYC might take some time; it can be hours or even a few days. This is so as banks want to be mindful while verifying. After completing the KYC, you will be provided with your bank credentials. You can use the credentials to have access to your savings account.
Conclusion
Digital Savings Account is a convenient option for people who prefer to manage their finances online and are comfortable with digital banking. They may also offer higher interest rates and lower fees than traditional savings accounts, as banks have lower overhead costs. However, it's important to research and compare different Digital Savings Accounts to find the best option for your needs. So research wisely and choose the one that fits you the best.
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