Opening Online Bank Account: With front line commercial banks such as SBI, ICICI or HDFC Bank reducing the interest rate on their fixed deposits across tenures, investors may consider investing and doing banking operations with the Small Finance Banks (SFB) which are also regulated by the RBI. Most Small Finance Banks not only offer a relatively higher rate of interest, but also have started offering banking services that come with ease of operation. Ujjivan Small Finance Bank is one such bank that has launched a digital savings account along with Fixed Deposit and Privilege Savings Account to offer distinctive banking and digital services.
Instant Savings Account
One can open an ‘Instant Savings Account’ instantly from a mobile phone or a computer. Such an instant savings account can be opened by using Aadhaar Card and Pan Card only. To open the digital savings account, one needs to download Ujjivan Bank mobile app which is available in 9 languages namely English, Bengali, Tamil, Kannada, Hindi, Punjabi, Marathi, Odia and Gujarati and start transacting immediately after opening the account.
Such a digital account will, however, have a restriction of Rs 1 lakh that can be deposited into it.
For additional deposits, one needs to complete full KYC by visiting the bank’s branch along with the documents. As a digital savings account holder, there will be unlimited free transactions on the bank’s own ATM and 6 free transactions on other bank ATMs every month.
One can also invest in ‘Instant FD’ up to a maximum of Rs. 1 Lakh without a Savings Account.
Privilege Savings Account
Privilege Savings Account is another offering from the bank that comes with an eligibility condition of a monthly salary of Rs. 30,000 or above or on maintaining a Monthly Average Balance of Rs 25,000 or on opening a Fixed Deposit of Rs. 10 Lakh.
The Privilege Savings Account offers Platinum Debit card, domestic airport lounge access, home branch facility across 552 branches of the bank with unlimited transaction on any ATM and a higher accidental insurance cover of Rs. 2 Lakh.
Fixed deposits are apt for capital preservation and not for creating wealth. For goals that are short term in nature or for emergency needs, the FDs may serve the purpose. Keep the taxation of interest income into consideration before investing in FD as the interest income is entirely taxable as per one’s tax rate.