Things You Will Need To Open A Bank Account
03 Jul 2019
A leading bank like Bank of Baroda offers a bouquet of savings accounts that you can pick from to park your salary and income from other sources with, while earning some interest based on the type of bank account you choose to open.
At the end of the day, your needs are as unique as you. From daily transaction to fulfilling your professional goals, our savings bank accounts are one stop solution for all your needs. Access your account and transact from anywhere, anytime with our digital banking services.
Before you do that, here are a few documents you will need to keep handy to open a savings bank account.
What are KYC norms?
Know Your Customer norms apply to everyone who wishes to open a bank account. KYC is certain basic information that the banks need to have about the applicant. This information is backed up by necessary documents submitted by the applicant to authenticate his/her identity. This is basically to weed out potential frauds and monitor suspicious high value transactions that may be related to illegal trades, money laundering or other financial scams.
The documents you will need to submit while applying for a bank account are-
Proof of identity
For this, you can provide
- Voter ID Card
- PAN Card
- Government/Defence ID Card
- Driving License
- Pension Payment Orders issued to the retired employees by Central/State Government Departments, Public Sector Undertakings
- Photo ID Cards issued by Post Offices
- Photo identity Cards issued to bonafide students by a University, approved by the University Grants Commission (UGC) and/or an Institute approved by All India Council for Technical Education (AICTE)
Proof of address
You can provide any of the following as proof of address
- Driving license
- Salary slip
- Income tax assessment order
- Utilities like electricity bill, landline bills-not older than 2 months.
- Bank statement
- Letter from employer/public authority (should be validated by bank)
- Ration card
- Voter ID card
- Retired government employees can produce pension payment orders
- Registered leave and license agreement or sale deed or lease agreement.
- Please note, every time there is a change of address or change in any other detail furnished to the bank, the applicant will need to immediately notify it to the bank along with updated document proofs.
2 latest passport size photographs
The Next Steps
- After having all the documents in place, applicants need to fill up the bank account opening form. Fill up all the mandatory fields. For questions or enquiries about the form, a customer representative is always available for help during the branch’s working hours.
- Now, the application form along with the above documents needs to be submitted at the bank branch. Applicants should keep the originals with then, which will be required for verification purposes.
- Bank executives examine and verify the documents and that the details submitted in the form matches with that on the document proofs like name, date of birth, address, signature among others.
- Applicant may be asked to make a token deposit for account opening. This does not apply to zero-balance accounts.
- The applicant will receive a debit card and other welcome literature on the address submitted by them in the application form.
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Savings vs Current Accounts the key differences
Opening a bank account is one of the first steps we take towards financial independence. We start with small savings that we deposit each time we come upon extra money by opening a savings account. As our financial requirements change, we find the need to open an additional account, to conduct daily transactions especially business transactions. Such an account is known as a current account. In this article, we shall highlight the major differences between savings and current account and understand the procedure to link your Aadhaar card with either account.
Savings and current accounts – how they differ
Both, savings and current accounts come with their own set of features which makes them different in several ways. Both accounts are meant to address the various financial needs of account holders. Let us look at the significant factors that distinguish the current account and savings account.
The purpose of the accounts: Savings accounts are designed by banks to encourage savings among account holders, whereas the current account is intended for people who need to make frequent transactions especially for business purpose.
The type of account holder: Savings account are best suited for individuals with a steady source of income; salaried employees, for instance. This type of account is an excellent option for anyone with short-term financial goals in which one can keep depositing or withdrawing money as per their requirements. The government encourages everyone to open savings accounts. Current accounts, on the other hand, are best suited for people in business, companies, firms, organisations, public enterprises and so on. They are meant for people who need to carry out repeated money transactions.
The frequency of transactions: Individuals, who have a savings account, are permitted to make a limited number of transactions every month. You typically get 3 to 5 transactions every month, including financial transactions like fund transfers, cash deposits and withdrawals to non-financial transactions such as getting account statements, ordering cheque books etc post which you are charged a certain amount for each transaction. The difference between current account and saving account in this respect is that you can carry out unlimited monthly transactions of all kinds.
Interest: You can earn a quarterly, half-yearly or annual interest of 3.5% to 6% per annum (depending upon your bank and account type) on your savings account. You are also allowed to accumulate an unlimited amount of funds in these accounts. On the other hand, you do not earn any interest on the monies parked in a current account.
Average minimum balance: Each bank asks the account holder to maintain a fixed sum of money or minimum balance into their accounts. One has to pay a penalty for non-maintenance of minimum balance. You are usually required to maintain a low minimum balance in savings account, (which can even be zero in case of a salary/ zero-balance account), whereas as current account holders are required to maintain relatively higher minimum balances.
Now that we have highlighted the main differences between the two accounts let us understand how to link Aadhaar card with bank account (for DBT benefits only). You can visit the bank and follow the below steps
Ask for an Aadhar linking application form at the bank; enter your current/savings account details and Aadhaar Number.
Attach a self-attested photocopy of your Aadhaar card with the application and carry your original Aadhaar card to furnish to the bank for verification purposes.
The bank will accept your request and link your account to Aadhaar.
You will receive an SMS notification from the bank when the Aadhar link to bank account is successfully completed.
You can also link your Aadhaar card to your bank account through internet banking by going on the “My Account” section and entering your Aadhaar card details and verifying using OTP or through your mobile banking app in the same way
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Types of Accounts and Deposits
What are the types of accounts and deposits available?
It’s important to know where you can save your money. As the rule goes, high-risk on your capital can result in a higher return while investing money in low-risk instruments would result in lower interest.
Banks, including Bank of Baroda offer a host of instruments that are what can be termed as low on risk and medium to low on return.
We shall now look at the various instruments that are available to a customer to deposit their money with the bank and earn returns.
Types of Deposits
A primary function for a bank is to mobilise public money. They do so in the form of deposits. There are two types of deposit accounts that you can open in a bank. They are time deposits and demand deposits.
A Time Deposit also known as a Term Deposit is a deposit which has a fixed tenure and earns interest for the customer. The tenure varies for each instrument and may even change from bank to bank.
The most widely used name for time deposits is Fixed Deposits. The common feature among all Time deposits is that they cannot be withdrawn prematurely. One should thus plan their deposits according to their requirement for money going forward.
The more the money resides in the bank of a term deposit the more interest it earns. Banks pay higher interest in longer-term deposits than on shorter ones.
Fixed Deposits earn higher interest than a Savings Account because the former gives Banks leg room to lend to people who need the money for roughly the same time limit. For example, a one year fixed deposit in a bank can allow the bank to lend money to a person who requires a personal loan for one year period.
Commercial banks have over the years made Fixed Deposits more attractive by offering various frills like overdraft facility, zero cost credit cards, nomination facility, safe deposit lockers, internet banking among others.
In this case, a fixed amount, as decided by the depositor, is deposited at regular intervals till the end of the tenure. The accumulated interest and the principal is given back to the depositor at the end of the tenure. The tenure of a recurring deposit can be anything from six months to 120 months.
As the name suggested, you can withdraw this deposit on demand. Such funds are held in accounts where it is easier to withdraw money either by going to the bank or an ATM. Savings and Current accounts are the two types of commonly used Demand Deposits account,
In such type of deposits, the risk is low but so is the return. However, there is one more factor that this type of deposit has and that is liquidity since money can be withdrawn at a moment’s notice.
The reason for the existence of such accounts is to provide the customer convenience of meeting his daily requirement of funds. It does not serve the purpose of ‘investment’ or ‘wealth creation’.
TYPES OF ACCOUNTS
These are interest-bearing accounts where the rate of interest depends on the bank where it is deposited. Further, there are restrictions in terms of the number of times money can be withdrawn from this account. These restrictions are also imposed by the bank and may vary between two banks. The depositor can withdraw his money by going to the bank and use the withdrawal slip or use his cheque book or go to an ATM and use his card. Money can also be transferred to someone else by using the cheque facility or using an electronic mode of transfer.
This type of account is generally operated by companies and firms. These are the non-interest-bearing deposit and serve the purpose of providing liquidity. Since there are many transactions in these accounts, the cost of managing them is high. Hence banks ask the depositors to maintain a minimum deposit. Current accounts have overdraft facility which the banks provide the customers to meet their short-term liquidity mismatch.