Things you will know after reading this article:
- What is a bank account?
- What are the advantages of opening a bank account?
- Who is eligible for opening a bank account?
- What are the documents required, and why?
Before going on to the boxes one needs to tick for being eligible to open a bank account, lets discuss what is a bank account. According to the definition, a bank account is an arrangement made with a bank whereby one may deposit and withdraw money and in some cases be paid interest. In simpler words, an account is a place where one stores his/her money for its gradual growth by the rate of interest charged, for its safety and various other reasons. This discussion is going to revolve around savings account as a centre, for basic introduction.
Here is a list of reasons why storing money in a bank account is the wise thing to do:
- Safety- your money is safe in a bank account, it is kept untouched from any lows or highs of the stock market or any other variables.
- Liquid Funds- your money is always available to you, while staying in a safe place with interests being charged upon it as a growth.
- Convenient- storing money in a bank account is by far the most convenient mode of transaction in today’s rapidly digitalising world.
- Short-term saving- storing money in a bank account for a near future prospect as it is the easiest way. You can save the money and easily transact it whenever the need arises.
Now, Who is one considered eligible for opening a bank account?
Opening a bank account is an easy process, these are the criteria one should fulfil:
- Citizenship of India- for opening a bank account in India one should be the citizen of India.
- 18 years- the individual should be at least 18 years old, which is legally an adult.
- Minors- a minor individual (below the age of 18) can open a bank account too, however it is compulsory to have a parental or adult guidance to open the account on their behalf.
- The individual must hold all the official documents required.
- The individual must be capable of providing the minimum balance if required for opening an account of their choice.
We know who is considered eligible for opening account, let’s move forward to the main topic of our discussion, What are the documents one needs to have for opening a bank account, and why?
|DOCUMENT REQUIRED FOR:||IMPORTANCE||DOCUMENTS THAT YOU CAN PROVIDE|
|IDENTITY PROOF||The bank needs to know that the individual opening an account is the citizen of India, and the document has a photograph of the person opening the account.||PassportPAN cardDriving licenceRation CardBirth certificateSC/ST/OBC certificates|
|ADDRESS PROOF||The address of India further proves the citizenship and identity of the individual.||Voter ID cardUtility billsPermanent driving licence Ration cardAadhar card|
- PAN card- It is a permanent proof for the identity in India
- 2 latest large sized photo graphs- for authentication of the person opening the account.
Form 16- this document is required ONLY IF the individual is unable to provide a PAN card. Form 16 is a Form 16 is the certificate issued under section 203 of the Income tax Act for tax deducted at source (TDS) from income under the head ‘salary’. The certificate provides a detailed summary of the amount paid or credited to the employee and the TDS on the same. This form is issued annually in accordance with the provisions of the Income Tax Act normally after the end of the financial year for which it is issued.
Banks provide account holders with the facility of providing them a nominee in their account. A nominee is a person that can operate one’s account on their behalf. It is a compulsory section that needs to be filled up while opening a bank account. If the chosen nominee is a minor, he/she will be allowed to operate the account only when they turn 18 years old.
A bank account is a place where your money is safe, and also under your constant watch. Your money is not stagnant, there is constant growth of your assets due to the interests that are given upon the sum of money in the account. As discussed, it is the best method of short-term savings, which is because of the easy deposit and transaction facilities. In today’s world, where every aspect of our lives is digitalised online transactions is the convenient mode of payment, and safe as well. By following these easy steps and opening a bank account, one can ensure life-long safety and assurance of their assets.