How to Choose a Bank?


Banking experience reached a new stage after Jan Dhan Yojana ‘s launch, allowing everyone to open a bank account. For so many banks providing savings accounts with different options depending on the services offered, choosing a suitable bank can be confusing.

Here’s something you can cross your list when zeroing into a branch.


Choose a convenient location bank. A centralized, well-connected location is better than any bank in a suburb’s far corner. Many banks have switched to core banking that allows you to deposit, withdraw, or make other transactions in any branch. Not all branches are connected so home location is a safer choice.

Fees paid

Look out for banks charging their fees and blasting you with fines. As last year, banks reduced the use of ATMs to a certain amount every month, without extra use charges. In the case of check bounce, PSU bank charges a nominal Rs. 50-100, but between Rs . 400-500 a private bank may fine you. Compare the fees paid by banks on issuing the chequebook, canceling the check, issuing a duplicate statement or passbook, and third party signing verification.

Several banks also bill you for four checkbooks a year. Even, when redeeming credit points, you can have to pay extra. Private banks’ additional costs are a trade-off for better and efficient services, but PSU banks sometimes deliver poor services.

Common management function

All banks require average or minimum balance in your account. This can range from Rs . 1,000 for government banks and rise to Rs. 25,000 for foreign banks. The minimum balance threshold is determined on a monthly or quarterly basis, and if the accounts fail to display that, you are penalized. The penalty depends on the form of bank and may range from Rs. 350 / month to Rs. 1,000 / quarter.

Your savings account also pays 4-6 percent while generating higher returns elsewhere. Despite of this, banks, including State Bank of India, have lowered the minimum balance requirement for their savings account customers and several other banks may follow suit.

Banking online

Many banks also offer internet banking, improving and updating services and functionality to suit their counter-competitions. Before opening an account verify if the bank has this facility and is free or not.

Merit Councils

The RBI allowed banks to give a minimum interest rate of 4% on your savings account. So, if you look around, you can get 6-7 percent interest rates for your money. Since up to Rs. 10,000 received through the bank is tax-exempt, this is a good investment tool.

A better option is the auto-sweep facility, which combines your savings bank account ‘s liquidity with higher fixed deposit interest rates. If your bank balance hits a certain cap, the excess fund is transferred to your account. But for some time, these assets remain locked or inaccessible for withdrawal.


Many banks, besides local banks, have launched banking applications. Make sure your bank uses a user-friendly app to make bill payments simple.

Hours of service

Some private banks open between 8:30-9:00 am, while PSU banks usually open only 10 am. Banks remain open till late evenings. Far better are those banks open on Saturdays and Sundays. Branch timing is a very important consideration point for customers not yet in net or mobile banking services.

Pick a bank that fits the requirements. Going to a popular bank can not benefit long-term. Look for good interest-rate banks and less extra charges.

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