State Bank of India (SBI) offers various services under its personal banking portfolio. Lender's savings bank account, one of such feature, allows customers to keep their money safe and helps them grow their savings moderately. The customer identification in case of a savings bank account is done on the basis of documents provided by the customer as proof of identity and proof of address. However, there is another offering by SBI, known as small account, which can be opened even by customers who do not have KYC (Know Your Customer) documents.
SBI's savings bank account
In case of a savings bank account, SBI charges an interest rate of 3.5 per cent per annum on saving deposits balance up to Rs. 1 crore. Saving deposits balance above Rs. 1 crore charges 4 per cent per annum interest rates, as mentioned on SBI's portal- sbi.co.in.
Savings Bank account can also be linked to Multi Option Deposit (MOD) account for earning higher term deposit interest on surplus money. Customers need to maintain an average monthly balance (AMB) in their savings bank accounts. Average Monthly Balance (AMB) is the minimum average of deposits required by the bank customers in their accounts. Customers failing to meet the AMB requirements in a month have to bear certain penalty charges.
SBI's small account
SBI's small account can be opened by any individual who is above 18 years. However, there are many restrictions in operation of the account due to the relaxed KYC. SBI's small account can be converted to regular savings account upon submission of KYC documents. This type of account is primarily meant for poorer sections of society to encourage them to start saving without any burden of charges or fees. Unlike, SBI's savings bank account, there is no average minimum balance (AMB) required to be maintained in this kind of account.
If KYC documents are not submitted to the bank within 24 months of opening of the small account, no transaction other than for closure of account is permitted.The maximum balance amount that can be maintained in SBI's small account is Rs.50,000. Interest rates of SBI's small account are similar to that of regular savings bank accounts.