A few things you need to know about your savings bank account

A savings bank account is generally considered a basic bank account, where you keep some funds, and probably have your Systematic Investment Plan(SIP) and ( Electronic Clearance System) ECS running from the account. But is that all? Not really. That was pretty much true in the past.

A savings account was a plain vanilla product, which gave 4 percent per annum as interest irrespective of the bank you had an account with. But in 2011, the Reserve Bank of India (RBI) changed the rules of the game by deregulating the savings account interest rate which a bank can offer, notes a report in the Economic Times today.

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There are new rules now. The same old savings account has changed in many ways. For instance, previously you had to ensure that you had maximum funds in the savings account between 1st and 10th of every month.

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This is because interest of 4 percent per annum was calculated on the lowest balance available during that period. But after 2010, you need not worry about maintaining balance date wise, now you get interest on a daily balance method. Also due to deregulation of interest rates, now there are banks such as Kotak Mahindra Bank and IndusInd Bank that offer higher interest rate.

Today you can actually earn even as much as 7 percent on a savings account. And the best thing is as per the Income Tax rules, n you get a tax benefit for interest earned up to Rs 10,000 in year.

Read the entire_Economic Times_ report here.

Want to know more about the benefits of savings accounts? Read an earlier Firstpost report here .