Account types and the right one for you
In this chapter: Savings, current, salary, and zero-balance accounts · Sweep-in FDs and the auto-conversion options · Interest payment, TDS on FD interest, and the 80TTA deduction
Savings accounts are for individuals; current accounts for businesses (no interest). Salary accounts are zero-balance variants that banks offer to companies as a perk. Beyond the basic types, look at sweep-in features — your savings beyond a threshold automatically becomes a short FD earning higher interest, and gets pulled back if you need it. This is the simplest cash-management upgrade most people never use.
Savings interest above ₹10,000 per year is taxable under Section 80TTA (₹50,000 for senior citizens under 80TTB). FD interest is fully taxable as "income from other sources" and TDS at 10% kicks in once interest crosses ₹40,000 per year (₹50,000 for seniors). Submit Form 15G/15H if your total income is below the basic exemption, and the bank will not deduct TDS. The TDS is recoverable but eats into your liquidity; it is far better to avoid it where you legally can.
The most underused feature is the linked-FD overdraft: pledge your FD to the bank and borrow up to 90% of its value, paying ~1% over the FD rate. This is cheaper than every other consumer loan in India, never reports as a separate liability on credit reports if structured correctly, and is the right tool for short emergencies — far cheaper than a personal loan or credit-card revolve.