But what does portability of savings account really offer to the customers? Is it beneficial? If yes, then how? Below, the meaning and benefits of savings account portability has been deciphered and put together to provide a clear picture about the concept and its usefulness to the customers.
The phenomena of savings account portability
Savings account portability is a facility which enables customers to shift from one bank to another bank without changing the savings account number or the standing instructions for the accounts (like payments of utility bills etc).
Benefits of Savings Account Portability
1. The finance ministry had proposed the introduction of savings account portability just after Reserve Bank of India deregularised interest rates on savings bank accounts. This led to some banks increasing interest rates to as high as 7% (Yes Bank) in the said segment whereas some lenders did not show a favorable response (ICICI bank, SBI).
In such a scenario, portability of savings account number will enable customers to avail higher interest rates by simply shifting to another bank offering higher interest rates without much hassle. This will provide customers a choice over cost of service and ensure that they get a level playing field with the banks.
2. Portability of savings accounts will help the customers to change from bank to bank without having to go through the tedious Know Your Customer (KYC) norms again and again. They would be required to submit the KYC documents only once.
3. It will also be beneficial for people with transferable jobs or those who change their employments frequently, for they will not have to undergo the tedious and boring formalities of terminating existing accounts and then opening new ones.