Savings accounts

A savings account is a suitable addition to anyone who wants to save a portion of their cash that they do not currently need.

For many people, a savings account is the only savings product on which they have all their savings.

Most Czech banks and credit unions offer a savings account. Interest rates are around the level of inflation. Savings accounts are maintained free of charge, as is their establishment. Compared to a current account, savings accounts have several limitations.

Especially in transfers of money to other accounts. Banks have thus ensured that everyone who wants to use their savings account must open a current account with their bank. However, there are several exceptions in the Czech Republic that do not require the establishment of a current account with the same bank or credit union.

Setting up a savings account

A savings account, like most other accounts and financial products, can be opened by a person who has reached the age of 18. An identity card or passport is used to verify identity.

There are several ways to open a savings account:

  • by visiting a bank branch (or by visiting a credit union branch)
  • through the website and filling in the relevant forms
  • through a telephone banker

If an account is set up via the Internet application or by telephone, the future owner of the savings account must prove his / her identity. This is done by presenting an identity document to a special courier, who will bring him the necessary contractual documentation. The courier verifies the identity and hands over the documentation.

Fees associated with a savings account

Most savings accounts are maintained free of charge. Special transactions, such as the transfer of money from a bank A savings account to a bank B current account, may incur a charge. Therefore, it is advisable to study the bank’s tariff before signing a savings account agreement.

Advantages and disadvantages of savings accounts

The main advantage is a reasonable interest rate on available funds, which is around the level of inflation. At the same time, one of the main disadvantages is inflation. This may be higher at some point than the current interest rate on a particular savings account.

For many people, a savings account is the only way to multiply their money. on the contrary, the advantage is that this savings product is for many a springboard for the use of other deposit or investment products or instruments.

Savings account vs savings account

There is often a savings account or, conversely, a savings account in banking terminology. In both cases, it is a synonymous designation of the same product. An account has the same meaning as an account.

Attribution of interest and taxation of income on savings accounts

Interest is accrued on a monthly or quarterly basis. It depends on the specific settings of the given savings account. Income, ie interest, is subject to withholding tax. Taxation is carried out by the bank or credit union at the moment when it credits interest to the client’s account.