PMJDY’s 0 balance account opening online account is a boon for Indians

Possessing a zero balance savings account on the electronic platform is a great way for beginners to get acquainted with the habit of saving and also develop an understanding about handling finances.  Some time back, there were no great schemes for the underprivileged till the Ministry of Finance under the leadership of Prime Minister Narendra Modi came up with the Pradhan Mantri Jan Dhan Yojana (PMJDY) in August 2014.

Within six months of its launch, there were a record 11.5 crore household fresh bank accounts. Soon the credibility of the government in achieving targets was restored and they also provided new benchmarks for setting targets by other ministries. Today, it has over 37.5 crore beneficiaries have banked so far and Rs 103,531 crore balance in beneficiary accounts.

The 0 balance account opening online under the PMJDY scheme aims to bring about a radical change in the traditional banking system in India and covers even the economically weaker section of the society, who never ever had a basic bank account.

One of the major benefits of the yojana is that all banks are on Core Banking Solution (CBS) platform and can be transferred to any branch of the bank in any city.

Below given are some of the unique features under PMJDY

1. No minimum balance required 
2. Interest rates on deposits as per the bank rates
3. Rs 1 lakh accidental insurance cover
4. Free RuPay debit cards accepted at all ATMs and PoS machines. Debit card must be used at least once in 45 days to avail benefit of accidental insurance cover.  
5. Government schemes benefit are directly credited to account
6. Entitlement to a loan of Rs 5,000 after six months of opening account 
7. Overdraft facility within six months with an interest rate charged on overdraft value lower of (base rate+2%) or 12%
8. Allows mobile banking services 
9. Provision for a joint account.

Eligibility:  

The criteria for a 0 balance account opening online may differ from bank-to-bank. But the basics required by most banks include that the applicant must

• Be a resident of India
• Be above 10 years of age  
• Not have other savings account with the bank
• Have complete KYC documents like – ID/address proof, passport size photograph 

Provisions for HUF account holders:

• Apart from these, even Hindu Undivided Families (HUF) account holders are also eligible to a 0 balance account opening online. The HUF account holders would be required to submit Copy of PAN card or Form 60 of HUF, ID proof of Karta and Address of Karta and a prescribed Joint Hindu Family letter signed by all adult members. 
  Additional details can be availed by browsing our website https://savingaccount.in/.  

Why women operate savings account differently than men?

 Women are ‘intelligent’ beings when it comes to managing finances. In fact, they do most things differently and do better than men. They have been big-time money savers. In fact, for eons, Indian women have been saving little sums in sugar cans, books and here and there until the banking system came up with a women savings account. 

Soon women realised their financial rights and were not satisfied with just a saving account. They are natural money defenders and clinch it really hard. They are designed to have things –rather almost everything - in control and thus, invest your money smartly. Of course, do have their loose ends like ‘where to start from’, they do splendidly well with a little hand-holding and guidance.

Let us take a look at what makes our otherwise dainty women such strong money defenders.

Taking risk is not their cup of tea:

Unlike men, who are biologically designed to have better risk-taking abilities, women like to think in advance for any eventualities and be prepared for any situation. No wonder they are more calculative are perfect household managers and love perfection. It wouldn’t be wrong to say they are bad ‘shock absorbers’.

Stability is a habit:

Women link money with security and stability. They like to put everything in order and love it when things are in control. Hence, they plan their loan EMIs, instalments, children’s fees, or even buying cosmetics and balance their remaining expenditure even while saving for the rainy day well in advance. In other words, women tend to refrain from short-term savings unless they think there could be possibility of expenditure ahead.

Goal oriented savings have great rewards: Women prioritise their goal and save accordingly. They could save for a summer cruise next year or even to buy a car or to prepare for the arrival of a child. In fact, they love such savings for it could help them buy some gold as well with it.  It is true that goal-oriented savings accounts are stricter than the regular women savings account they may possess, but then they also reap richer rewards.

Patience is key to saving:

Time is money they say, but women- without any regrets and rightly so - take their time exploring options and eventualities before finally zeroing in on what they are exactly looking for. And why not? After all, opting for a saving scheme is like investing or blocking money and it must bring back the desired dividends. It definitely isn’t as easy as setting out to open a women savings account.   

More information can be availed by surfing https://savingaccount.in. 

Dormant Savings Account: Need for reclassifying, penalties, reactivation

Dormancy basically means a state of inactiveness. But in terms of savings account ‘inactivity’ and ‘dormancy’ are separate terms. 

When there has been no activity or transaction in a savings bank account for a period of 12 months, it is classified as an ‘inactive savings account’ and if the account continues to be inactive for subsequent 12 months, it is determined as a ‘dormant savings account’. However, bank-initiated transactions, such as interest on savings balance or penalties and service charges debited by bank are not considered while classifying accounts as dormant.

RBI guidelines:

The Reserve Bank of India (RBI) has advised banks to exercise due diligence before clearing transactions from dormant savings accounts. It has also given a free hand to the banks to decide ‘whether and on which features’ to impose restrictions of the dormant accounts.

While some banks restrict ATMs, netbanking and phone transactions, some others do not allow change in address, issue or renewal of ATM/debit/cheque book requests, etc, of such accounts.

Need of reclassifying accounts: Reclassifying account as ‘dormant’ reduces the risk of frauds, both internally and externally. Banks maintain details of such inactive accounts in a separate ledger.

Valid transactions:

Banks recognise valid debit or credit transactions which include withdrawal of cash at a branch or automated teller machine (ATM), payment by cheque, transfer of funds through Internet banking, phone banking or ATMs, inward and outward bill payments, etc., but system generated transactions like interest credit and service charge deduction, are not considered valid. However, dividends on shares or the proceeds of fixed deposit (FD) in the savings account are considered as a customer induced transaction or as operative.

Penalty:

No charges are required to be made in order to reactivate a dormant bank account. In June 2014, the RBI asked the banks not to charge penalty for non-maintenance of minimum balance in dormant accounts.  If any bank imposes a charge, it must be reported to the banking ombudsman.

Reactivation:

The account holder can reactivate the dormant bank account by simply making a deposit or withdrawal transaction. The account holder may be required to visit the home branch and provide a written request for reactivation of the account. The bank may, however, require a fresh KYC documentation like a recent photograph, address proof or any identity proof. Re-activation of a dormant account will be handled as meticulously, by the bank, as opening a new account, since unused balances may lie in such accounts.

Closure of account: A dormant account will have to first be reactivated and then the usual closure form can be submitted to close it.

For more details, visit https://savingaccount.in.