Selecting a bank account and advantages /disadvantages of the same

[whittney1234]

@alysiakgc208 I have the ICICI Amazon Pay, which is auto-linked to the account with autopay scheduled. Other than this, I have the HDFC Regalia and Axis Select which are linked as billers. I can schedule the dates and amount of payment to both of these. I have adjusted all 3 billing cycles such that they fall on the ~30th of every month, to help me fulfill the 50,000 MAB requirement for my Gold Privilege account.

 

[ricwil]

@whittney1234

I have the ICICI Amazon Pay

Any benefits? I have the coral card.

 

[whittney1234]

@ricwil Yes, 5% cashback for Amazon transactions, 2% for Amazon Pay, 1% everywhere else. Credited straight back to your Amazon Pay wallet.

 

[tay1964]

@cn17 I too have an account with RBL Bank and I don't like their internet banking. For lot of things, they ask you to visit branch straight away. Eg: FATCA declaration.

 

[angmbryan]

@tay1964 You cant even get a card issued from the MoBank app

 

[cn17]

@tay1964 Ohh interesting. I actually have faced no issues when transacting by mobile or internet banking, but maybe I haven't found an issue yet.

 

[ron351ne]

@cn17 You should consider one of the largest public sector bank -Bank of Baroda. It has one of the best online account opening process and it’s mobile app m connect plus is Way better then any private bank!

 

[bonabeans]

@cn17 Of the digital banks, feels like Paytm Payments Bank has been missing. I have an account since 2 years back. Use it for shopping and all. The experience has been smooth. Don't remember facing any downtimes. The UI/UX for passbook and everything is so fluid in my opinion. I would recommend one to give it a try to see how it is for them.

 

[ericanicolee]

@bonabeans can I connect it with UPI and use it to pay and shop online? Also for paying for Netflix?.

 

[bonabeans]

@ericanicolee Absolutely

 

[maitri]

@cn17 If I take out a loan from a small co-operative bank and then the bank fails, do I get away with not paying it back?

 

[cn17]

@maitri No.

 

[aeworld]

@cn17 I'm having three accounts, never faced any issues with any of them. I like SBIN website and YONO app the most

Axis Bank - Salary - Otherwise min 10K - Almost all transactions, have 0 fee cc here, kinda struck to this, demat bank account linked to this - all dividend are paid here, (have relationship manager here, ain't that useful, calls and forces me to do FD ). They increased my CC limit sufficiently well when required (to keep my CC spends below 30%)

ICICI Bank - (Wealth Account - No Min balance) - Have my PPF account here, so far the best customer service (Wealth privilege). Asked many times to increase my Amazon ICICI limit many times, once they do, good bye to Axis

SBI - University account, No min balance - Not using this much much now, (Initially wanted to open PPF account with SBIN, but it required me to visit branch so opened on ICICI, they are not fully digital)

 

[spreadthewordofgodalways]

@aeworld Did your huge volume in ppf make you eligible for wealth in icici or you do keep such huge amount in icici?

 

[aeworld]

@spreadthewordofgodalways No it's not because of PF, it's because of my father's account, icici has been his main salary account for more.than 10 years - overall 50L minimum has be transacted, and their children also get wealth accounts for free

 

[jcsga]

@cn17 can we write points of the online services that these provide. like address change we don't need to visit branch in icici but in hdfc everything requires a branch visit and forced app pin change every 90 days. Are there any good online bankings where the branch visits are bare minimum (everything is online -self service from account lock/unlock address change pin generation etc... and easy to operate interface)

ICICI we can enable/disable international transactions, set limits can do lot, but hdfc sucks to the core.

what about other banks in terms these features?

It would be helpful persons working in different countries or does not have consistent signatures.

 

[resjudicata]

@cn17 I have SBI, Axis, Paytm bank accounts.
For Axis -> Good digital infrastructure (have for 5 years and haven't faced any upi failures), have upgraded there banking portal + haven't visited bank for any service requests as everything done via net banking, bank staff is great wherever I have gone for any issue
Cons: charges are on higher side and MAB, keep trying to sell Max life/term insurances

 

[jgibson8888]

@cn17 My experience so far

Indian Bank - account was opened during my school days . Services are good and so is customers support, been my primary account now don't use it

PNB - worst customer support and visiting bank is always a horrible experience , kind of main account but I mostly save & forget

Paytm Payments Bank - good services, never faced any problems , no any transfer failures
In terms of UPI transactions ; it's the fastest & most reliable mostly used for expenditures

DBS - opened account due to their policy of unlimited ATM withdrawals , which ultimately they scrapped. Services are good so is Customer Support , only issue is they spam a lot having promotional offers with Big basket etc.

 

[patriotraider]

@cn17 Nice article. Thanks for taking time to compile and share. I'd apply the following considerations:

How much money to keep in banks:

1. Decide how much of high liquidity funds you need. Avoid keeping in excess of that in banks. Consider Liquid and Short duration funds beyond that.
2. Certainly keep the funds within the insured limits.
3. Be mindful of the taxation. Beyond Rs 10k the interest is taxable on savings accounts. Depending on your tax bracket you may count the rate of return as 2/3rd of what it is. E.g. a bank offering 6% is actually 4% in your hands.

How many accounts do you need. Every individual knows best his or her answer. Following are my thoughts:

1. Fewer the accounts the better to manage. But see if all needs, such as listed below, are met.
2. If you are salaried, your employer will provide limited choice of salary account banks. If the same account meets some of your other needs, well and good, else you may have to keep salary account for name's sake and move the funds to other banks.
3. While choosing the banks you may want to consider
   1. Quality and cost of service for your own banking needs. Don't get carried away by general goodies offered by a bank. They all come with a price - such as minimum balance condition, lesser rate of interest etc. Within your needs choose a good account type and a suitable bank, for example, do you often need physical access to the bank, do you need terms that are favorable for frequent cash deposits/withdrawals or do you need demand drafts too often etc.
   2. Rate of interest on savings account. If above account meets this need, well and good, else you may want to open one more with a bank that offers higher rate of interest and keep some funds there to leverage higher rate of interest.
4. I am not a great fan of the idea of different accounts for different financial goals. I am quite content earmarking funds for a purpose within one account. But some people may prefer to keep water tight accounts for different purposes, which is quite subjective.

Coming to specific names that I have dealt with and would recommend / not recommend:

1. IDFC Bank. Much better service than most others mentioned below. But not a great rate of interest.
2. RBL Bank. Greater rate of interest, but not as great quality of service. If the interest rates keep dropping they will lose their sole differentiator and I'd not recommend them. But for now, you can consider keeping some funds here. As such, as long as you don't face any issue, with business-as-usual, there is no problem with them. But the moment something goes wrong, it's hell lot of an effort to deal with them. In these matters IDFC is a lot better.
3. I or my family members have had relationship with each of these banks and we suffered so much with their poor quality of service and issue resolution that we'll never ever go to them, no matter what proposition they bring: ICICI, SBI, HDFC, Axis, Indian Bank, Bank of Maharashtra, Kotak. A strict no.
4. There is one bank which I wished well for and hoped that they do well: DBS Bank. But after initial promise they didn't improve much and the quality of service started dropping. After I found IDFC Bank better on many of these aspects, I closed the relationship with DBS.
5. On service quality aspect I found Citibank good, but they aren't good on interest rate, or generally their services are costly. More importantly why bank on someone who has declared closure of the retail business. So striking them off the list.
6. I am not a great fan of co-operative banks. But Saraswat Bank for one is supposedly good. (Never dealt with them myself.)

 

[poltionorch]

@cn17 If RBI has a limit of 5L as amount insured against one account what's stopping a regular Joe from opening 10 accounts in same or different banks to spread say 50L rupees. Is this a recommended approach? Say open one account in every TBTF and PSU bank? Any downsides of doing this?