All posts by Vinayak

Banks and financial institutions provide a variety of account options to meet the different needs of their customers. To make the most of your bank account, you must select the right option.

From everyday transactions to long-term savings, each type of bank account serves to help people and businesses manage their money effectively. If you are wondering what the different types of bank accounts are, check out this list:

1. Savings Account

It is the most common form of bank account, suitable for salaried professionals, college students, homemakers, retired citizens, and many more. You can deposit money into a savings account and withdraw it when you need. The money in your savings account earns interest as per the bank’s prevailing interest rates. 

Savings accounts can be of various types.

IndusInd Bank offers three types of Savings Accounts online:

Type of account	Indus Delite Account	Indus Max Multiplier	Indus Select
Unique feature	A zero balance savings account that can be opened instantly anytime, anywhere.	Offers the dual benefit of a savings account with higher returns on Fixed Deposits.	Offers a wide range of customised services, special privileges, cashback, and discounts, and more.

Also Read: Open your Savings Account in 4 Easy Steps.

2. Current Account 

From the different types of bank accounts, a current account is ideal for traders, merchants, and business firms. It is preferred by those who make more financial transactions than others. Usually, a current account allows limitless daily transactions. An overdraft facility that allows you to withdraw more than your account balance is also offered.

Current accounts can also be of various types. Each type can offer features suitable for a particular type of business and growth plan. 

3. Salary Account

When you join a new firm, you are likely to create a new bank account with which the firm has a tie-up. This is your salary account, where the employer will transfer your salary. 

These accounts are special savings account that allow you to receive your reimbursements and allowances sent by the employer. 

4. Fixed and Recurring Deposit Accounts 

The above types of bank accounts are apt for regular transactions. When it comes to long-term savings, a fixed deposit account or recurring deposit account is ideal. 

With a Fixed Deposit (FD) account, you can deposit a lump-sum amount of money for a set period (tenure). Based on the tenure you choose, your deposited money earns interest at a fixed rate. 

On the other hand, a Recurring Deposit (RD) account is one where you deposit a fixed amount of money periodically for a set tenure. Here, too, the deposited money earns interest as per the tenure chosen. For both FDs and RDs, the longer the tenure, the higher is the interest rate. 

While you may be able to break the deposit before the tenure ends in both cases, it is not advisable. Your money will not be able to earn interest at its full potential. In some cases, it may attract penalty too.

5. NRI (Non-Resident Indian) Bank Accounts 

Banks offer different types of bank accounts for Indians or Indian-origin people settled overseas. These include:

a. Non-Resident Ordinary (NRO) account: Allows NRIs to deposit their foreign and Indian earnings. Foreign earnings are converted into INR at prevailing rates. Interest earned on the deposits is taxable. 

b. Non-Resident External (NRE) account: Allows NRIs to deposit their foreign earnings only, which is then converted into INR. However, interest earned is not taxed in India. 

c. Foreign Currency Non-Resident (FCNR) account: Allows the NRI to deposit and maintain money in foreign currency. Interest earned is not taxable within India. 

To conclude, there are various types of bank accounts in India. You must review your banking needs and look at how many types of bank accounts are available to meet those needs. 

If you’d like to open an online bank account with IndusInd Bank, the process to do so is seamless, paperless, and 100% digital. Begin your journey of convenient banking with IndusInd Bank right away! 

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.

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Savings Account

What is the Full Form of VPA? What is VPA in UPI?

July 19, 2024 Vinayak Leave a comment

The Unified Payment Interface (UPI) system has become considerably popular over the last few years. One can split bills with friends, pay merchants to buy groceries or recharge their phone with just a few clicks. UPI has revolutionised the way people make payments and handle financial transactions. 

The ease and convenience of UPI make it a preferable mode of payment. The reason for this is a Virtual Payment Address or VPA. If you have made a UPI payment recently, you may have heard of the term ‘VPA’.

Read on to know what VPA means and its role in the UPI process.

Understanding VPA in detail

VPA, as its full form (Virtual Payment Address) suggests, is a digital ID that enables you to send and receive funds through UPI-enabled apps. 

With a VPA, you no longer need to enter lengthy details like the bank account number, branch name, or the IFS code. The VPA acts as a single indicator of the UPI account. With a VPA, senders can recognise and verify the recipient’s identity (and vice versa). Thus, it allows for an easy, safe, and convenient transaction. 

A VPA generally has the following structure: username@bankname. 

Is VPA the same as UPI ID?

Many might wonder if a VPA ID means the same as a UPI ID.

Yes, a VPA and UPI ID refer to the same thing. It is the virtual/digital address through which money can be sent and received. 

How to Generate and Use a VPA ID?

The system sets up a VPA when you register on a UPI-enabled app and link your bank account. You can also choose a VPA ID as per your preference. 

The process to create your Virtual Payment Address is as follows:

Install the relevant UPI app on your phone.

Enter the mobile number linked to your bank account.

Once you have entered the required details, you will get the option to create your VPA ID. Usually, some VPA options may already be provided. You can choose from amongst these or create your own.

After you have set up your VPA, you have to set up your UPI PIN, which can either be four digits or six digits.

Once you set the PIN and link your bank account with the UPI app, you can initiate transactions from the VPA ID.

Now that it is clear what Virtual Payment Address or VPA is in UPI and how to create it, let us understand how to use it. 

To send money, enter the recipient’s VPA in the UPI app. Choose the ‘Pay via VPA’ option. Enter the payment amount, followed by the PIN. The payment will be processed instantly.

To receive money, you must share your VPA with the sender. The latter can follow the above steps to send you the money. You can also request money by entering the sender’s VPA and the amount. Once the request is sent, the sender will get a notification. They can go to their UPI app and follow the payment procedure.

If you have an IndusInd Bank Savings Account, you can link it to your UPI-enabled app and make financial transactions from your account easily. 

Also Read: Exploring UPI: Can Current Account Holders Utilise It?

Opening an IndusInd Bank savings account is very simple and 100% digital. All you need to do is enter your mobile number, PAN card, and Aadhaar card details. Then, you can complete video KYC and finish the remaining processes online. Once all steps are complete, your bank account opening process will also be completed. 

Get started on your financial goals with IndusInd Bank now! 

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Fixed Deposit

What is Lien on Fixed Deposit? Understanding its Benefits and Risks

July 19, 2024 Vinayak Leave a comment

Fixed deposits are time-tested investment tools that work well as emergency funds. You can park your excess cash or savings into a protected fund and earn stable returns over time. This tool suits investors with low-risk appetites since their funds are preserved without losing value due to inflation.

You must understand the meaning of the lien amount in case your FD acts as collateral for any credit instruments like home or education loans. This lien amount is the sum of your FD that lenders and other financial institutions may charge if you fail to clear pending dues or comply with the bank’s investment guidelines.

What is Lien Amount in FD?

The lien amount on FD is the locked portion of your FD investment that a lender has the right to claim if you don’t fulfil the loan’s contract. Investors aren’t permitted to access this amount for withdrawal till the pending settlements are cleared. You can only transfer or cash out this lien amount once the bank authorities have greenlit your loan clearance.

A classic example is when your FD is offered as collateral or security for any credit facility or loan. It allows lenders to position a lien on your account and restrict any premature activity like FD closure or withdrawal until you’ve cleared the loan.

Benefits of Lien on FDs

Investors can benefit from a lien on FDs in the following ways:

Quicker Loan Processing: Fixed deposit account holders with a lien marked on their investments typically get faster loan approvals. Expect quicker disbursal of funds since the FD acts as a ready security for the lender.

Immediate Credit Availability: Such lien amounts enable fixed deposit investors easy access to credit facilities. It includes credit cards or personal, education, and marriage loans. Simply offer your FD as security and get immediate enrolment to credit tools without breaking into your FD. Even better, you can manage financial emergencies without losing the accrued interest.

Enhanced Loan Terms: Having an FD lien means you’re in the front seat for more favourable loan terms compared to unsecured loans. Lenders and banks will offer lower interest rates since their risk is also low because of your collateral. It allows borrowers to leverage their FDs without losing their interest-earning potential.

Also Read: What’s The Minimum Amount Due in Credit Card Bills

Risks of Lien on FDs Amounts

The risks come as an add-on despite the upsides. Be careful of the following disadvantages of a lien on your FD:

Fund Access Restrictions: The loan borrower or general investor can’t access or withdraw the FD funds until the lien is lifted. It limits financial flexibility since the lien amount only becomes accessible after the associated loan is repaid in full.

Room for Losing Your FD Amount: There’s a high chance of losing your FD balance if you’re a loan defaulter or fail to clear your credit lines in time. The lender may use the lien marked to recover the outstanding loan amount, leading to a loss of your investment.

Impacts Utility of Interest Earnings: Investors with a lien on fixed deposit investments may continue to earn interest but may be unable to use these funds to settle loan obligations. It affects their financial planning capability and utilisation of interest earnings.

How to Avoid Lien on FDs?

You can avoid a lien amount on your FD through these strategies:

Maintain separate accounts for loan repayments and fixed deposits to prevent automatic lien by the lender.

Use alternative assets as collateral for loans instead of your FD.

Repay your loans religiously to avoid banks from exercising lien on any of your deposits as a recovery measure.

Add several investment asset types to your portfolio, such as money market funds, public provident funds, and bonds.

Also Read: Fixed Deposit Calculators: Convenience at Your Fingertips

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.

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Fixed Deposit

What is Auto Renewal in Fixed Deposit?

July 19, 2024 Vinayak Leave a comment

Fixed deposits are a preferred investment option for Indian bank account holders. They can also serve as emergency funds during unexpected situations like unemployment, vacations, or high medical expenses. Typically, the amount you invest is returned with a fixed rate of interest after a set period—which you can calculate using the IndusInd Bank FD Calculator.

Investors may compromise on the interest rate bonus in an event that demands spontaneous funds. It calls for cashing out your FD investments beforehand!

On the other hand, many investors don’t need these investment amounts immediately. Thus, they keep their money locked in and protected as an FD. In this case, the auto-renewal of fixed deposits is the best option since you can keep earning interest on these investments.

What is Auto-Renewal in FD?

FD auto-renewal is when your money invested in fixed deposits starts another cycle automatically after maturity. Investors like you can withdraw these funds earlier in case of an emergency.

But if there’s no urgent need to break your FD, you can opt for an auto-renewal fixed deposit that restarts your new lock-in period.

Remember that, by default, the new FD cycle will stay locked in for the same period but at a new interest rate.

Two Methods for Renewing Your FDs

You can do an FD auto-renewal via setting standing instructions, physically visiting a branch, or using our bank’s smartphone application.

Fixed Deposit Automatic Renewal

Banks or financial institutions can use this method only when they have standing instructions for renewing your FD. It implies that when the FD maturity period is complete, your bank will automatically initiate a new FD investment period with the specifics you had chosen when booking the FD for the first time.

Investors can decide on the FD auto-renewal feature at the initial stages of setting their FD or at any point during the FD’s lock-in period. Regardless of when you do it, the bank will auto-renew your FD at the current interest rate the day it matures.

Note that the present interest rate on offer may be lower than your earlier interest percentage. It means a lower current interest rate could damage your potential earnings.

Manually Renewing FDs

If you want to renew your FD manually, you must visit a customer representative at your bank’s nearest branch or do the process online. Do this process near your FD’s maturity period to avoid missing interest when your fixed deposit becomes inactive.

The upside in this FD renewal process is that the bank offers the same interest rate if you wish to renew your investment for the same period as earlier.

Also Read: Step-by-Step Procedure for Renewing and Withdrawing a Fixed Deposit

Is There a Problem if I Don’t Renew my FD?

No, there’s no problem. Your bank account will simply be credited with the matured FD amount, and the FD will no longer be active.

Firstly, no bank will automatically renew your FD unless you’ve given them prior permission to auto-renew. Secondly, once your FD matures, the bank will inform you of the transaction into your account. Thirdly, there’s no chance you won’t get access to your funds whether or not you renew your FD.

Our FD interest calculator lets investors know how their FDs perform over time.

Benefits of Auto Renewal in FD

Auto renewal is one of those features that quietly makes life easier. When your fixed deposit matures, it gets renewed automatically—no need to remember dates or take action. This means your money keeps earning interest without any gap.

Here’s why people find it useful:

You don’t miss out on interest: If you forget to renew your FD on time, even a few days’ delay can mean lost earnings. Auto renewal takes care of that.

It’s hassle-free: No need to visit the bank or log in to your account. It just happens.

Great for cumulative FDs: If you’ve chosen a cumulative FD, auto renewal helps your investment grow further through compounding.

One less thing to track: Especially helpful if you have multiple FDs or a busy schedule.

Why Do Banks Provide Auto Renewal Facility?

From the bank’s point of view, auto renewal is a win-win. It keeps customers invested and simplifies operations. Here’s why banks offer it:

It helps retain customers: If your FD renews automatically, you’re more likely to stay with the same bank.

Less paperwork: It reduces the need for manual processing and follow-ups.

Better customer experience: Especially for senior citizens or NRIs who may not be able to visit the branch easily.

Factors to Consider Before Opting for Auto Renewal of FD

Auto renewal sounds great, but it’s not always the best choice for everyone. Before you opt in, think about the following:

Interest rates may change: Your renewed FD will earn interest at the rate available on the day of renewal. If rates have dropped, your returns might be lower.

Same tenure gets repeated: If your financial goals have changed, you might want a shorter or longer term.

Tax implications: Renewed FDs can affect your taxable income, especially if the interest pushes you into a higher tax bracket.

Need for liquidity: If you think you’ll need the money soon, manual renewal gives you more control.

Two Ways to Withdraw Fixed Deposit

Unless you choose fixed deposit auto-renewal investment channels, here are two ways to withdraw your FDs.

After Maturity: This is a straightforward method, as investors can withdraw their principal amount with added interest once the FD matures. You can also choose the FD auto-withdrawal feature, which allows the bank to directly credit your savings account.

Before Maturity: Although not recommended, investors can withdraw their FD earlier to meet unexpected payments. Be wary of the penalty for such early withdrawals.

FAQ Related to Auto Renewal of FD

Q1. Can I turn off auto renewal after enabling it?

Yes, you can cancel it anytime before the FD matures. Just contact your bank or update your settings online.

Q2. Will I get the same interest rate on renewal?

No, the renewed FD will earn interest based on the rate available on the day of renewal, which could be higher or lower than before.

Q3. Is auto renewal available for all types of FDs?

Most banks offer it for both cumulative and non-cumulative FDs, but it’s best to check the terms with your bank.

Q4. What if I forget to disable auto renewal?

Your FD will be renewed for the same tenure. If you want to make changes later, you may need to break the FD early, which could lead to penalties.

Q5. What happens if an FD is not renewed?

If you don’t renew your FD, the bank may transfer the maturity amount to your linked savings account. In some cases, the amount might be held in a non-interest-bearing account until you give instructions.

Q6. Is there a problem if I don’t renew my FD?

While there’s no penalty for not renewing, your money may stop earning interest after maturity. That means you could miss out on potential returns if the funds just sit idle.

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Savings Account

What is a Savings Account? How Does it Work?

July 18, 2024 Vinayak Leave a comment

A savings account is crucial for managing your finances effectively. You can save for various purposes while having easy access to your funds. Choosing the right bank, such as IndusInd Bank, ensures that your savings account is more than a place to park your money. It is one of the pillars for securing your financial future.

Read on to learn what a savings account is, its benefits, how to open one, and more. 

What is a Savings Account?

A savings account is a type of bank account provided by banks and financial institutions. Once you open a savings account with a bank, you can deposit money into it. The funds deposited earn interest and grow over time depending on the bank’s prevailing interest rates. 

A savings account has no lock-ins. Thus, you can withdraw funds when you need them. 

Savings Account Definition

As per the savings account definition, it is a bank account that allows individuals to deposit their savings. By depositing your money into a savings account, you enjoy its gradual growth while benefitting from liquidity and negligible investment risks. 

You enjoy competitive interest rates, attractive offers and deals, seamless banking, and more when you open a savings account with IndusInd Bank. 

Now that you understand what a savings account is, let’s dive into its benefits. 

What Are the Benefits of Having a Savings Account?

If you open a savings account, these are some of the benefits you enjoy: 

1. Safe Place to Store Money

As mentioned earlier, a savings account is an ideal tool for storing your funds securely. With the bank’s security measures in place, your funds will remain protected. 

2. Liquidity 

One of the key benefits of having a savings account is that you can withdraw funds whenever you need them. You can locate an ATM and withdraw cash or make online transactions too. 

3. Steady Growth of Funds

Letting your money sit idle is a crime. The funds deposited in a savings account earn interest, unlike when kept at home. Hence, choosing a banking partner that offers competitive savings account interest rates is crucial. 

4. Additional Services and Features

Nowadays, one can enjoy attractive features with their savings account to make their finances work in a better way.

For instance, IndusInd Bank offers the Smart Sweep feature with its Indus Multiplier Max Savings Account. The USP of this savings account is that any excess balance over Rs 20,000 automatically converts into a Fixed Deposit (FD), allowing your money to earn higher interest. In case of a shortfall of funds in the savings account, a portion from the FD is broken and shifted back to the savings account. Also, there is no premature closure penalty applicable in this case. 

5. Offers and Deals

Another benefit of having a savings account is access to exclusive offers and deals. These can range from discounted movie tickets to dining vouchers, and even cashback rewards on purchases.

Choosing a banking partner that provides the features and benefits you need is advisable. 

Also Read: Benefits of Family Grouping in Online Savings Account

What are the Different Types of Savings Accounts?

Now that you have understood what the benefits of a savings account are, let’s look at the different types of savings accounts available in India. 

1. Regular Savings Account

This type of savings account is ideal for your everyday banking needs. Usually, this type of account may have a minimum balance requirement. 

2. Family Savings Account

If you want your loved ones to enjoy the benefits and privileges of a single savings account, you can consider a family savings account. 

For instance, IndusInd Bank’s Select Savings Account allows you to share your account privileges with up to 4 family members for free! 

3. Salary Savings Account

When new employees join an organisation, they usually open a salary account with a bank with which their employer has a tie-up. The employee has complete control over this savings account and can continue using it after leaving the organisation. 

4. Premium Savings Account

A Premium savings account is a high-end savings account that allows you to enjoy exclusive benefits. These include a dedicated relationship manager or team, lifestyle privileges, lounge access, personalised wealth management solutions, and more. 

5. Senior Citizen’s Savings Account

Tailored to meet the needs of individuals over 60 years of age, a senior citizen’s savings account often provides health and investment-related benefits. Most banks offer a slightly higher FD interest rate than the standard for senior citizen account holders. 

6. Zero-Balance Savings Account

The USP of this type of savings account is that it does not have a minimum balance requirement. The bank does not impose any penalty or charges even if the account balance dips to zero.

7. Instant Digital Savings Account

As its name suggests, this type of account can be opened instantly and digitally. You can open it via the bank’s mobile application or their website. The KYC for the process can be carried out virtually.

8. Women’s Savings Account

Some banks offer special savings accounts designed for women. Account holders get benefits such as rewards and offers on shopping, discounts on lockers, and more. There may be a relaxed minimum balance requirement too.

9. Kids’ Savings Account

Parents looking to save for their children (under 18 years) can do so under a kids’ savings account. The child can have limited access to the account, which can help them learn about banking and money management from a young age.

Review your banking needs and choose a savings account that is right for you.

How to Open a Savings Account?

Having understood the meaning of a savings account, its benefits, and types, let’s look at how to open one with IndusInd Bank. 

Before we begin, note that the IndusInd Bank account opening process is instant, completely digital, and paperless. 

Here’s how you can start your savings account journey in a few simple steps:

1. Create and Personalise Your Account Number

IndusInd Bank allows you to select your preferred account number. You can input your mobile number and use it as an account number if you prefer. Thus, you have the flexibility to customise the account number to your liking. 

2. Fill in Essential Information

Next, fill in important personal details such as name, contact information, date of birth, and address. Also, keep your Aadhaar card and PAN details handy for verification purposes.

3. Add Funds to Your Account

After the bank verifies your account, you can deposit money and enjoy a steady growth in your savings over time. 

4. Go Through the Video Call KYC 

Gone are the days of lengthy paperwork with hassle-free video KYC process from IndusInd Bank. You can complete Know Your Customer (KYC) verification via a simple video call within a few minutes. 

Who Can Open a Savings Account?

The following entities can open a savings account:

Individuals above 18 years of age

Minors, with the help of their parents or guardians

A foreign citizen

A Hindu Undivided Family

Rules and documentation differ based on whether it is an individual or an entity opening the savings account. 

The Bottom Line 

The bottom line is that opening a savings account is an essential step in one’s financial journey. Make the most of your savings account using digital banking services, competitive interest rates, exclusive offers and deals, and more with IndusInd Bank’s Savings Accounts.

So, what are you waiting for? Apply for a Savings Account right away! 

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.

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1. Savings Account

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Understanding VPA in detail

Is VPA the same as UPI ID?

How to Generate and Use a VPA ID?

What is Lien Amount in FD?

Benefits of Lien on FDs

Risks of Lien on FDs Amounts

How to Avoid Lien on FDs?

What is Auto-Renewal in FD?

Two Methods for Renewing Your FDs

Fixed Deposit Automatic Renewal

Manually Renewing FDs

Benefits of Auto Renewal in FD

Why Do Banks Provide Auto Renewal Facility?

Factors to Consider Before Opting for Auto Renewal of FD

Two Ways to Withdraw Fixed Deposit

FAQ Related to Auto Renewal of FD

Q1. Can I turn off auto renewal after enabling it?

Q2. Will I get the same interest rate on renewal?

Q3. Is auto renewal available for all types of FDs?

Q4. What if I forget to disable auto renewal?

Q5. What happens if an FD is not renewed?

Q6. Is there a problem if I don’t renew my FD?

What is a Savings Account?

Savings Account Definition

What Are the Benefits of Having a Savings Account?

1. Safe Place to Store Money

2. Liquidity

3. Steady Growth of Funds

4. Additional Services and Features

5. Offers and Deals

What are the Different Types of Savings Accounts?

1. Regular Savings Account

2. Family Savings Account

3. Salary Savings Account

4. Premium Savings Account

5. Senior Citizen’s Savings Account

6. Zero-Balance Savings Account

7. Instant Digital Savings Account

8. Women’s Savings Account

9. Kids’ Savings Account

How to Open a Savings Account?

1. Create and Personalise Your Account Number

2. Fill in Essential Information

3. Add Funds to Your Account

4. Go Through the Video Call KYC

Who Can Open a Savings Account?

The Bottom Line

2. Current Account 

4. Fixed and Recurring Deposit Accounts 

5. NRI (Non-Resident Indian) Bank Accounts 

2. Liquidity 

4. Go Through the Video Call KYC 

The Bottom Line 