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How to switch a Bank Account in India?
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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A savings bank account is central to managing money and day-to-day transactions. However, if your existing savings account is not offering the benefits you need, such as a good internet banking infrastructure or a good interest rate, you may consider switching your bank account to a bank offering better features. To open a new bank account in India is not a lengthy process. The documents needed to open a bank account are minimal, usually KYC documents and income proof. However, what you do need to keep in mind when switching a bank account in India are some other important things. These include:
1. Figuring out your reason for switching
You first need to know the exact reason why you want to switch bank accounts. That’s because this clarity will help you pick the right savings bank account for managing your finances. For instance, if you are switching accounts because you want a higher interest rate to earn attractive returns on your savings account balance, then you should look at high-yield savings accounts. Alternatively, if you are looking for flexibility and higher liquidity and do not want to maintain a minimum balance or be charged non-maintenance fees, you can consider zero-balance savings accounts.
2. Assess different banks
Once you know what kind of savings account you are looking for, assess the different banks offering that kind of savings account and compare their features. Check the minimum balance requirements, the interest rate offered, the mobile banking and internet banking services, the ATM network, charges and fees, etc. These are important factors to consider when you want to open a new bank account.
3. Open the new bank account
Once you have decided on the bank and type of savings account you want to open, apply for it and submit the documents needed to open a bank account. Once your account is opened, remember to register for mobile banking and internet banking services and maintain the savings account minimum balance. You should also make a list of all the automatic payments and bills you have on your existing savings account and make sure to set those up with your new savings bank account.
4. Close the existing bank account
Once your new bank account is up and running and you have transferred all your automatic payments and deposits to it, you should look into the process of closing your old account. This can be done online or offline, depending on the bank and its procedure. It is important to deactivate your old account if you don’t plan on using it to avoid paying non-maintenance charges and other fees.
When you decide to open a new bank account, make sure it meets all your needs and will make managing your personal finances easier. You should also consider opening your new account in a bank that can be helpful to you for other reasons such as availing loans at attractive rates, debit cards and credit cards with various discounts and offers, and good customer service. This will ensure that your personal finance needs, beyond that of a savings account, will also be met as and when the time comes.
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