You and your spouse have a savings account in the same bank. You are also thinking of opening an account there for your daughter. Did you know that all three can be clubbed together under a ‘Family/Group Savings Account’?

Clubbing does not mean merging all these accounts into one. It simply means that the bank will identify the accounts of your family members with a common ‘family ID’.

By doing so, you could be entitled to several benefits such as lower charges on certain transactions, discounts, flexibility in maintenance of minimum balance and so on. At the same time, each account holder in the group can continue to operate their accounts as they always did. Foreign banks such as Standard Chartered and Deutsche and a handful of local banks such as HDFC, ICICI, DCB, YES Bank and IDBI bank offer this facility.

Who’s allowed

Typically, parents, in-laws, spouses, siblings, grandparents, children and grandchildren are included in the list of eligible family members. By filling up a simple form requesting for a group savings account, all eligible accounts can be grouped. These accounts can be clubbed even if they are held in different branches of the same bank, in different towns.

While at least two accounts are needed to form a group, usually, about four to six accounts can be clubbed. Some banks also allow non-resident accounts to be counted in. All group accounts will be assigned a common user/customer id. The family members can identify a specific person as the primary member. His/her user id could be common for the group.

Five benefits

One of the most important advantages of holding group savings bank accounts is the flexibility in the maintenance of minimum/average balance. Take the ‘aXcessPlus’ savings account of Standard Chartered for instance. While a quarterly average balance of Rs 25,000 is required for each account when held independently, grouping your family’s aXcessPlus accounts means that it is enough if this Rs 25,000 is held across all the accounts in the group.

Considering that banks charge a few hundreds for non-maintenance of minimum balance, this helps circumvent the charges. Besides, when you fail to maintain the required balance for all accounts put together, the penalty is charged only to the primary account or in some cases to the account with the highest balance.

Two, a derived benefit from this flexibility is that it is easier to hold an upgraded account as a group than as an individual. For example, if you want to open an ICICI Bank ‘Gold Privilege Savings Account’ individually, the minimum monthly average balance (MAB) is Rs 50,000. But if you form a ‘Gold Privilege Family’, the required family MAB is Rs 1 lakh. This implies that if there are four accounts clubbed, then this Rs 1 lakh can be spread across all four in any combination. At the same time, all members can get privilege access/priority treatment at all branches and in customer care.

The third sweetener is the concession or waiver on some transaction charges and discounts on bank products. For example, HDFC Bank’s family savings group offers a Gold Debit Card at a 50 per cent discount to all applicants for the lifetime of the group, a 50 per cent discount on locker rent for the year of allotment, and 3-4.5 per cent discount on its Mudra Gold bars. Demand draft charges for the family account holders are waived up to Rs 50,000 an account a month.

Fourth is the facility to sweep from one account to another inside the group, provided by some banks. If you hold ‘Super Savings Family Account’ with IDBI Bank, it comes with a family fund transfer facility. Under this, balances will be swept automatically from one family account to another in case there is a shortfall. This would come in handy when, say, you have issued a cheque but your account does not have sufficient balance to honour the cheque.

Finally, although you will have a common customer id, banks that we spoke to assure that your privacy will not be compromised.

This is because you will access your account online using your own password. SMSs regarding transactions or one-time passwords will also come to your individual mobile numbers (if you have provided them) even if it is a part of the group account.

conditions

A point to be noted is that banks allow only certain types of accounts to be grouped. For example, under what ICICI Bank calls as the ‘Savings Family’, only a regular SB account, or a ‘Life Plus Senior Citizen’ , ‘Young Star’ or ‘Advantage Woman’ accounts can be grouped. HDFC Bank does not provide the family feature to its ‘Savings Max’ account holders. Some banks may not allow salary accounts to be clubbed.

> vardhini.c@thehindu.co.in

Related Topics
comment COMMENT NOW