How to Open an Online Savings Account

14 JANUARY, 2021

Online Savings Account is easy to open. You can open an Online Savings Account instantly by filling the online account opening form available on a bank’s website or the bank’s mobile banking application. 

According to the RBI guidelines, banks can open a Savings Account instantly for customers through the Aadhaar-based One-Time password (OTP) verification process. The bank accounts opened through the process is termed as Online Savings Account or Digital Savings Account.  This regulation has made it easier for individuals to open Digital Savings Account from their home, without visiting a bank’s branch. The entire account opening process is online and you don’t need to fill any physical forms. You can open your account within a few minutes and start using your savings account instantly. Many banks have introduced digital savings accounts to ease the account opening process for their customers. One of them is Kotak 811, a digital zero balance savings account from Kotak Mahindra Bank. 

Eligibility Criteria

Most banks offer digital savings account to new-to-bank customers or customers that don’t have any existing relationship with the bank.

General eligibility requirement:

  • Individuals above 18 years of age
  • Resident Indian citizens.


Documents needed:  

  • PAN card
  • Aadhaar* number


Different banks have varied eligibility requirements.

In case of Kotak 811, Politically Exposed Person (PEP), Non-Resident Indians (NRIs), institutions and organisations cannot open the digital account.

Features of Digital Savings Accounts

 It is easy to manage a digital savings account. You can avail banking services and facilities like online fund transfers, service requests, investments etc.

Here are top 5 features of Digital Savings Accounts:

  • Paperless process
    You can visit the bank’s website or download the mobile banking app to open your Digital Savings Account online, without leaving your house or visiting the bank’s branch. The online account opening process is completely paperless. You don’t need to upload any scanned documents either. All you need to do is type in your Aadhaar number, PAN and other details in the online account opening form.

  • Monthly Average Balance (MAB) requirements
    The monthly average balance requirement is possibly the only aspect of savings account that is not popular among banking customers. However, with online savings account, you don’t have to worry since online accounts have varying Monthly Average Balance (MAB) requirement. While The MAB of other digital savings accounts can range up to Rs.10,000, few Digital Savings Accounts like Kotak 811 don’t have any monthly average balance requirement.

  • Debit card
    Debit Card allows you to withdraw cash from ATM, make online payments, and pay for your purchases at shopping malls or supermarkets and digital savings accounts offer Debit Cards as well

    Online Savings Accounts have gone one step ahead. Depending on the Bank, customers can get a virtual debit card and/or physical debit card. Customers of digital savings accounts such as Kotak 811 receive free virtual debit card instantly and can also request for a physical debit card.  Kotak 811 customers can find the details of their Virtual Debit Card such as card number, CVV and other in their mobile banking app and can request for an 811 physical debit card through the app.

  • Online Transactions
    This is the age of online transactions and Digital Savings Accounts offer multiple ways to transfer money online like UPI, Mobile Banking, Net Banking, WhatsApp Banking, Scan & Pay etc. that lets customers transfer money without visiting a branch or an ATM. Kotak 811, in particular, lets its customers easily transfer money online with no charges. The ease of online transactions plays an instrumental role in going cashless.

  • Attractive Interest Rate
    Banks pay Digital Savings Account holders interest on the money maintained in the savings account, similar to a regular savings account. Although interest rates change from time to time, interest rate on savings account is still an advantage.


Benefits of Online Savings Accounts

Besides the regular features of Online Accounts, there are several benefits of Online Savings Accounts. Here are top three benefits of Digital Accounts:

  • Instant account opening
    Gone are the days when people had wait for days to open Savings Account. Now, you can open an Online Savings Account instantly. Just keep your PAN number, Aadhaar number and Aadhaar registered mobile number handy to open the account within a few minutes. After your account is open, you can deposit money from your other savings account into your new digital savings account and start making transactions online.

  • Different products offerings
    Online Savings Accounts offer much more than a bank account. It is a gateway to different banking products and solutions such as Fixed Deposits (FD), Recurring Deposits (RD), Sovereign Gold Bond and more. Most online savings account holders can avail different products online through net banking or mobile banking. You can book Fixed Deposits (FD), open Recurring Deposits (RD) online to earn a higher interest rate than a savings account to save money for emergencies or financial goals. 
    One example of such an offering for Kotak 811 customers is the Dream Different Credit Card. After opening their account through video KYC customers can book a fixed deposit of a minimum amount of Rs.15,000 and apply for an 811 #DreamDifferent Credit Card. This Credit card against a fixed deposit can help in building credit history or repairing poor credit score.

  • Auto sweep facility##
    Most banks provide auto sweep facility to their customers. Under this facility, banks can convert the funds above a specific limit into a fixed deposit automatically. As a result, money lying idle in the savings account can earn a higher interest rate than the savings account. You can opt for this option and give instructions to the bank for FD creation. Auto sweep facility is liquid and banks can transfer your money into your savings account whenever you need.


How is an Online Savings Account different from a regular Savings Account?

 

Features

Online Savings Account

Regular Savings Account

Account Opening Process

Open account online through  website or app

Visit the nearest bank branch and submit filled up physical form with documents and photographs

Time needed to open the account

Instantly

After three to five working days

Minimum average balance

Nil

Rs.10,000 onwards in metros

Debit card

Virtual and Physical debit card

Only Physical debit card

 

Things you should know before opening an Online Savings Account

Since accounts opened through the e-KYC process differ slightly from regular savings accounts, here are a few things that you should keep in mind before opening an online bank account.

  • If you open the online account through the Aadhaar* OTP verification process, the account opened is an e-KYC account. You need to complete the full KYC process within 12 months to continue using the account. Your account will be closed if you don’t complete the full KYC.
  • Before you carry out the full KYC process, there are restrictions on the maximum transactions and the maximum balance that you can keep in the account. The maximum balance that you can keep in your Kotak 811 account at any point in time is Rs. 1 lakh. Also, you cannot make transactions more than Rs. 2 lakh in a financial year.  
  • Online Bank Accounts opened through the video KYC process don’t have any limitations.
     

Open Kotak 811 account
 

FAQs on Online Savings Account

Are Digital Savings Accounts safe?

Digital savings accounts are safe. They are full-fledged Savings Accounts equivalent to regular savings account and are safe because the banks are mandated to follow the guidelines set by the Reserve Bank of India (RBI). 

How do I withdraw money from my Online Savings Account?

You can withdraw money from your instant savings account through your physical debit card, cheque book, cardless withdrawal facility and transfer money online.

You can also visit the bank branch to withdraw cash. 

 How  can I add money in a Digital Account?

You or anyone else can transfer money to your Digital Account with the help of your account number, IFSC code or UPI address. You can find these details in the email sent to your registered email address and on the mobile banking app of your bank. 

What is the minimum balance requirement for an online savings account?

While few online savings accounts introduced by other banks may have minimum balance requirement, Kotak 811 Account don’t have any minimum average balance requirement.

What is the difference between a normal Savings Account and an Online Savings Account?

Online Savings Account lets you open a Savings Account instantly with no paperwork or bank branch visit. 

Digital Savings Accounts are e-KYC accounts and have certain restrictions on maximum balance and total credits. Before the full KYC process, customers can’t keep a balance of more than Rs. 1 lakh in their account. Additionally, the total credits can’t exceed Rs. 2 lakhs in a financial year. Regular savings account don’t have these restrictions.

Online Savings Accounts are valid for 12 months. You have to complete the full KYC of the account to continue using it or upgrade the account. Regular Savings Accounts are valid for a lifetime.     

How do I choose a Digital Savings Account?

Many Digital Savings Accounts are available these days. Keep the points shared below in consideration when you’re choosing a Digital Savings Account for yourself:

  • Ease of account opening
  • Interest rate
  • Presence of physical branches
  • Type of debit card issued
  • Minimum balance
  • Initial deposit amount
  • Account closure charges


Disclaimer

*Giving Aadhaar details is voluntary.

##This Feature is only available for 811 Full KYC customers. By signing up for this feature, customer agrees to the following Terms & Conditions:

  • ActivMoney (Auto Sweep) is a facility of automatically sweeping out funds above a pre-specified threshold from your 811 Savings Account to a Term Deposit (TD) Account for 180 days. In case of insufficient balance in the account, the TD will be broken prematurely and the required amount will be transferred to the Account.
  • Default Sweep Out and Sweep In limit are the minimum pre-specified thresholds and one will not be able to opt for limits lower than these. For 811 Full KYC Savings Account the fixed deposit will be made or broken in multiples of Rs.2000/- and the default sweep out and sweep in limits are Rs. 20,000 and Rs. 10,000/- respectively.
  • The nomination registered for Saving Account will apply for the FDs created through ActivMoney. If customer opts for ActivMoney in an account, standalone Fixed Deposits cannot be linked to that account. Terms and conditions guiding the fixed deposit will be applicable to fixed deposits booked under ActivMoney.
  • Bank may at its absolute discretion, discontinue / suspend any of the services completely or partially with or without any notice to me.
  • In case 811 Full KYC customers enabled with ActivMoney facility upgrades to a different product variant, the ActivMoney functionality will be disabled and a fresh request will be required by the customer to renew the same.

 

 

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