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12 Feb, 2025

Special vs. Normal Savings Account: Which is Better for You?

Are you thinking of saving your hard-earned money in a bank but not sure which one to choose between a normal and special savings account? Don’t worry! With a clear understanding of key features and differences, you can make the right choice that suits your financial needs.

So, without further ado, let us find out everything you need to know about normal and special savings accounts, their differences, and an easy checklist to help you decide in this blog post.

Secure digital banking transaction illustration with lock icon

What is a Normal Savings Account?

A normal savings account is the most basic type of bank account where you can save money and earn interest. It is designed for everyday use, so it allows you to deposit and withdraw money as you need.

Even though normal savings accounts typically have modest interest rates compared to other account types, given the easy eligibility and opening process, it is one of the most common choices in Nepal.

Key Features

Zero or Low Minimum Balance: Most Nepali banks have a minimum balance requirement of Rs. 0 to Rs. 1,000 to maintain the account. For example, banks like Agriculture Development, Global IME , Nepal SBI bank, etc, have Rs. 0 as their minimum balance requirement for opening a normal savings account.
Easy Access: You can easily withdraw money from ATMs, bank branches, or using digital banking services. Likewise, you can visit any bank branch for necessary banking services.
Interest Rates: Currently, Nepalese banks offer modest interest rates of 3% to 4% and deposit them quarterly on normal savings accounts. You can use Saral Banking Sewa’s compare deposits tool to find which bank currently offers the highest interest on a normal savings account.
Service Fees: For the first year, banks offer their services, like debit cards, digital banking, or SMS alerts, free of charge, but afterward, they begin applying fees that typically range from Rs.250 to Rs. 1,000, depending on the service type.

What is a Special Savings Account?

A special or premium savings account is an upgraded version of a normal account specifically designed to offer higher interest rates and extra benefits. That said, oftentimes, it comes with higher minimum balance requirements.

Key Features

Higher Interest Rates: Banks offer significantly higher interest rates than a normal savings account and are currently up to 5%.
Higher Minimum Balance: Depending on the banks, the minimum balance required is typically higher and ranges from Rs. 1,000 to Rs. 5,00,000.
Insurance Benefits: Some banks also provide various types of insurance coverage, including medical, accidental demise/disability, and critical illnesses.
Special Discounts: Customers are eligible for discount packages on various banking facilities, such as lockers, foreign currency exchange, loan management, credit card subscriptions, etc.
Extra Savings Benefits: It offers extra perks like free banking transactions, lower fees, dedicated customer support, and many more.

Special Savings Account vs. Normal Savings Account

Features	Normal Savings Account	Special Savings Account
Interest Rate	3% to 4%	Upto 5%
Minimum Balance	Rs. 0 to Rs. 1,000	Rs. 1,000 to Rs. 5,00,000
Eligibility	Nepalese individuals above the age of 18	Nepalese individuals above the age of 18
Fees & Charges	Standard banking charges	Some services may be free or discounted
Additional Benefits	Basic banking services (ATM, online banking)	Insurance coverage, dedicated support
Exclusive Discounts	Free chequebook, debit card, and mobile/internet banking for the first year	Locker services, FCY exchange, loan management

Which One is Better for You?

Depending on your financial goals, needs, income, and saving habits, the answer differs. So, here is a quick checklist to help you decide.

Choose a Normal Saving Account if:

Just starting to save and don’t have a large amount of money to deposit
Prefer a low or zero minimum balance requirement
Fine with a standard modest interest return
Don’t need additional benefits like insurance or special discounts

Choose a Special Savings Account if:

Have an extra sum of money that you are comfortable setting aside
Saving for a long-term goal
Prefer higher returns
Need special discounts on various banking services
Require additional banking privileges

Conclusion

Both normal savings accounts and special savings accounts have their own advantages and limitations. Normal savings accounts are the best fit if you’re looking for flexibility and easy access, while special savings are for greater return over time with banking privileges.

Ultimately, the best choice depends on your financial situation and goals. Whatever you choose, ensure it aligns with your financial plan and helps you achieve your dreams!