*Before opening bank account.....
This article is based on my personal experiences with all types of
banks since last few years. Some of the members like ’’iyernarayan’’,
’’lilwitch’’ have already written good tips on ’’Choosing a bank’’.
I would recommend you go through most of the similar articles to
get the clear picture, since it is not possible to cover each and
every thing in one article in a limited time.
(1) Location of the bank:
After 3 years of my personal experience, I would give more stress this
point. First, find all the banks which are at a shorter distance from
your home. A bank near your home is best suited because at times
if you want to deposit heavy cash, you don’t need to carry it with you
for a long time.
(2) Visit the branch and scrutinize:
After selecting from your nearby banks, visit the branch and see its
overall working in busy hours. See if the branch is spacious and
well-managed. If you see chances of frequent long queues, as mostly
happens in busy Public Sector Banks, rude staff, ignore this
branch. In today’s competitive world, where Private and Foreign banks
are giving competition, see if you get a good banking atmosphere.
Sometimes a bank quite far, with Air-Conditioned atmosphere and small queues is
well-suited since your time will not be wasted to an extent as in
a nearby crowded and ill-managed branch.
In your visit to the branch, ask for the pamphlets to get informed
about the bank’s schemes, interest rates etc.. If it is a Private or
a Foreign Bank, carefully scrutinize its financial position in the
market and its Tarriff rates.
If you are a youth and if crowded bank is not a problem, then first think
a bit about any of your other family members visiting the bank.
For example, your parents, grandparents, etc.. They may find the
atmosphere tiresome.
See if the schemes of the banks meet your long term needs. If you are
of the type who make frequent transactions from many places, then
select a branch which has a wide network of ATM’s and branches.
In this case SBI is the first choice. You will find it’s branch
and ATM in every nook-and-corner of a city.
Try to move with the new style, don’t just keep investing in an
ordinary saving account. Sweep-In Accounts, ATM Card, NetBanking
and PhoneBanking are the technology of today. They may save time and
effort. See if your branch has any of these options.
Today, almost all of the branches are computerized. But I have see
in some Public Sector banks, you get an ordinary Pass Book which is
updated by hand. See if you can get a computerized Pass Book.
Some Insights
(1) Get it cleared whether the interest in your savings account gets
capitalized quarterly, half-yearly or annually. Some banks automatically
transfer a certain amount from your savings account to Fixed Deposit.
This gives more interest. Go for any scheme in which interest is
capitalized quarterly.
(2) If you are opening an account in a Private Sector Bank or any
Foreign bank, be very careful. Take a close look at the
charges on their services. For example:
-- How much they deduct from your account to withdraw cash?
-- How much is charged on the use of cheque?
-- How much for the use of ATM’s?
-- How much is fined if you fail to maintain Average Quarterly Balance?
-- How much to order a cheque Book.
-- How much will be charged if you later close your account?
etc...
Private and Foreign banks have many hidden costs which may be heavy
for a service class person. Ask frankly.
(3) Don’t just flatten to see higher interest rates in Private Banks.
They may earn from you the other way.
(4) If you are opening an account for a long term heavy investment,
example for a tenure of 5-8 years, WAIT. Take a look at the
Post Office schemes, which give more interest and are free from taxes.
(5) Don’t just open a Savings Account. Carefully decide what you want
and then select the investment strategy. An ordinary Savings Account
is not of much use today. Your money can be just safe but don’t think
that it will increase a lot in a year or two. All ordinary Savings Account
have 3.5% per annum interest rate.
(6) If you are opening an account for heavy saving, don’t just put
all your money in one bank and in one account. Always keep two or
three bank options. Carefully plan and divide the amount.
For example, if you just sold your plot for Rs. 7 Lakhs.
Don’t just put all the money in one bank. You may keep some in
Savings Account, some in Sweep-In Account and some in Post Office,
if you want long term investment and if it is not urgently needed back.
(7) Presently, one account in any Private Bank is beneficial because
of their prompt and world-class services and polite staff.
(8) Avoid congested branches where most of the time Pensioners and
other lower class persons are in the queue. These branches will waste
a lot of time and the branch staff will also become sometimes rude,
because of a large crowd. Opt for Tension-Free working.
(9) If you are in a mood of saving about Rs. 1000/- every month, then
open a ’’Recurring Account’’. This gives more interest.
(10) If you are in a mood of taking loans, see what interest the bank
charges. Go for the minimum interest rate.
.............................
Enough for this time.
Regards,
Rohit Prakash.