SAVING BANK ACCOUNT

Saving Bank accounts, as the very name suggests, are intended for saving for the future. This is the most common type of account which caters to the needs of vast section of people in the society. These accounts promote savings habit of people. Balances in this type of account earn interest by the depositor. This account is a form of demand deposit account. It includes both the categories of savings accounts, viz., savings accounts with cheque book facility and savings accounts without cheque book facility.

WHO CAN OPEN SAVING BANK ACCOUNT

Individual

Saving bank account can be opened by the followings.

i.                    Single person in his own name.

ii.                  Two or more person’s in their joint names to be operated in the following manner.

a.      Either or Survivor

b.      Jointly/ Jointly or Survivor

c.       Any one or Survivors or Survivor

d.      Former or Survivour

illiterate/blind persons

Club, Societies, Association

H.U.F Executor/Administrator

Minor account

Minor accounts in the bank can be opened and operated in two ways i.e. either operated by minor himself/herself or operated by the guardian of minor.

RBI has permitted that a minor who is above the age of 12 and who can understand the operations of the account and is literate (school going) can open and operated saving bank account in his/her own name. Such account can also be opened by two minors jointly with joint operations only. No overdraft is allowed in this account.

Bank can also open a saving bank account in the name of minor by his guardian either jointly with the minor or singly to be operated upon by the guardian. Guardian can either be a natural guardian or as appointed by the competent court.

Institutions which are eligible to open saving bank account

In terms of RBI directive, saving bank accounts opened in the name of any trading or business concern, whether such concern is a proprietary or a partnership firm, a company or an association, would not be eligible for any interest. The RBI, however, has exempted certain agencies/institutions from this prohibition on account of their activities aiming towards service of the weaker sections of society. Accordingly, the following institutions/ organisations are eligible for earning interest on their saving bank accounts on the usual terms:

i.                    Primary Cooperative Credit Societies.

ii.                  Small Farmer Development Agency (SFDA)

iii.                Marginal Farmer and Agri-Labour Agency (MFAL)

iv.                 Drought Prone Area Programme (DPAP)

v.                   Agricultural Produce Market Committee

vi.                 District Rural Development Agency (DRDA)

vii.               Fish Farmer Development Agency (FFDA)

viii.             District Development Authority (DDA)

ix.                 Integrated Rural Development Programme (IRDP)

x.                   Integrated Tribal Development Agency (ITDA)

xi.                 Khadi and Village Industries Board (KVIB)

xii.               Societies registered under the Societies Registration Act 1860 or any other corresponding law in force in a state or a Union Territory.

xiii.             Institution other than those listed below under head “Institutions which are not eligible to saving bank account” and whose entire income is exempted from payment of Income Tax under the Income Tax Act 1961.

xiv.             Companies under Companies Act 1956, which have been licensed by Central Government under Section 25 of the said Act, or under the corresponding provisions in the Indian Companies Act, 1913 and permitted not to add to their names word “Limited” or “Private Limited”.

xv.               Any other institution permitted by the RBI from time to time.






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