Indian customers are increasingly choosing digital savings accounts as opposed to traditional savings accounts to manage their finances. “Is there a difference?”, you ask? Read this article to know the key differences between digital and traditional savings accounts.
What are digital savings accounts, and how are they different from traditional savings accounts?
To open a traditional savings account, you need to be present in the bank during the account-opening procedure. However, digital savings accounts do not have this requirement. You can open a digital savings account online, via the bank’s website or mobile banking app. These accounts offer higher accessibility and flexibility to customers when compared to traditional savings accounts. They also charge lower fees for offering banking services. You can access a regular savings account, too, via a mobile app, however, the features offered will be limited.
Traditional vs digital savings account: key differences:
The following table details the feature-wise differences between digital and traditional savings accounts:
| Feature | Digital savings account | Traditional savings account |
| Account-opening procedure | You can open a digital savings account without visiting a bank branch. The process is paperless, and completely online. You can also access your savings account at all times. | The bank mandates your presence in a bank branch while opening a traditional savings account. You should also carry the required original documents and their photocopies to facilitate account opening. |
| Debit card | Banks offering digital savings accounts generally link these accounts to virtual debit cards. These cards are highly secure, do not have a physical form and have a limited life cycle. | The bank offers you a regular debit card if you sign up for a traditional savings account. You must also bear yearly maintenance charges for this card. |
| Eligibility | Anyone can open a digital savings account. | Banks generally have a minimum balance or monthly deposit criterion for traditional savings accounts. |
| Pre-requisites | You require a smartphone, internet connectivity, and the required documents (to be uploaded). | You must visit the bank branch with the relevant documents to open a traditional savings account. |
| KYC process | The KYC procedure can be completed online via methods such as e-KYC or video KYC. | You must visit the bank branch to verify your identity and address. |
| Accessibility | Digital savings accounts offer high accessibility to customers through mobile banking apps. | Certain banking services might not be accessible to traditional savings account holders via the bank’s mobile services. |
| Transactions | All online transactions made using digital savings accounts are generally free of cost. | Banks charge fees for online transactions like NEFT (national electronic funds transfer) and UPI (unified payments interface). |
You can go through the differences between digital and traditional savings accounts mentioned in the table to decide on the one that suits you best. Be sure to check the mobile banking service of a bank before signing up for its digital or traditional savings account. You must also check if the bank offers a high interest rate as it could help you considerably increase your savings in the long term.
