Savings accounts are a great way to save money and earn interest. They offer a safe and convenient place to keep your money and can help you achieve your financial goals. However, it is important to understand the limitations of savings accounts, including the number of transactions allowed in a month.
What are Savings Accounts?
Savings accounts are bank accounts that offer interest on the deposited balance. They are popular with people who want to save money in a safe and secure place. You can open savings accounts and can withdraw money as and when required.
What are the types of transactions that can be done in a savings account?
A savings account allows you to perform various types of transactions, including:
- Depositing money: You can deposit money in your savings account by visiting the bank branch, using an ATM, or transferring money online.
- Withdrawing money: You can withdraw money from your savings account by visiting the bank branch, using an ATM, or transferring money online.
- Transferring money: You can transfer money from your savings account to another bank account using online banking, mobile banking, or by visiting the bank branch.
- Making payments: You can use your savings account to make payments for bills, purchases, and other transactions.
What is the limit of transactions allowed in a savings account in India?
The free transaction limit for a savings account varies across different lenders and the type of savings account you hold. While some banks provide five free withdrawals per month, there are a few who may provide only three. This also applies to non-financial transactions allowed by banks.
Withdrawals: Withdrawals refer to transactions where you withdraw money from your savings account. Depending on the lender’s policies, you can withdraw money from your savings account only a predetermined number of times without attracting any charges. If you exceed this limit, you may have to pay a fee for every subsequent withdrawal.
Non-financial transactions: Non-financial transactions refer to transactions where you do not withdraw money from your account. Rather, you perform other activities like checking your account balance, updating your account details, or transferring money from one account to another. Depending on the financial institution’s policies, you can conduct such non-financial transactions only a predetermined number of times without attracting any charges.
What happens if the transaction limit is exceeded?
The bank may charge a penalty fee if you exceed the monthly transaction limit. The penalty fee varies from bank to bank and can range from anywhere between Rs. 50 and Rs. 200 per transaction.
Savings accounts are a great way to save money while earning interest on the deposited balance. However, there are certain restrictions on the number of transactions that can be made in a savings account within a month. It is essential for you to keep track of your transactions and not exceed the monthly transaction limit to avoid penalty fees and other charges.