PMJDY vs a Regular Savings Account: Which Should You Choose?

PMJDY vs a Regular Savings Account: Which Should You Choose?

The honest answer for most people is: a Pradhan Mantri Jan Dhan Yojana (PMJDY) account and a regular savings account are the same underlying product with different rules attached. A PMJDY account is a Basic Savings Bank Deposit Account (BSBDA) with zero minimum balance, a free RuPay card with Rs 2 lakh accident cover, and access to a small overdraft; a regular savings account usually demands a minimum balance but places no cap on transactions. This article compares the two so you can decide. For the full PMJDY benefit set, see the main Pradhan Mantri Jan Dhan Yojana guide.

PMJDY vs regular savings account at a glance

When does PMJDY suit you better?

PMJDY is the better fit if you cannot reliably keep a minimum balance, want a free RuPay card with built-in accident cover, are opening your first bank account, or need to receive government benefits by DBT. It is also the gateway to the Jan Suraksha schemes; PMJJBY, PMSBY and Atal Pension Yojana: all of which need a bank account. Because there is no minimum-balance penalty, the account cannot quietly erode to nothing through charges.

When does a regular savings account suit you better?

A regular savings account suits you if you transact heavily, the BSBDA's cap on free monthly withdrawals can be limiting, or if you want a chequebook and full-service features without the BSBDA restrictions. If you can comfortably maintain the minimum balance, a regular account gives you fewer transaction limits.

Can I hold both?

Not as two Jan Dhan accounts. PMJDY is meant for the unbanked, so you cannot open a fresh PMJDY account if you already hold a savings account, and the overdraft is limited to one per household. What you can do is hold one regular savings account and convert another to a BSBDA, or convert your existing account into a BSBDA to get the RuPay card and zero-balance benefit. A person's Aadhaar can be mapped to only one account for DBT at a time, so decide which account should receive government benefits.

Which should you choose?

• Choose PMJDY if minimum-balance penalties are a worry, you want free accident cover on the card, or you receive DBT benefits.
• Choose a regular account if you transact frequently and can maintain the balance.
• Best of both: ask your bank to convert an existing account to a BSBDA. You keep the account and gain the zero-balance rule and RuPay cover.

Frequently asked questions

Is the interest rate different? No. A PMJDY BSBDA earns the bank's normal savings rate.

Does PMJDY still give Rs 30,000 life cover? No. That launch-period cover closed for accounts opened 15 August 2014 to 31 January 2015. Life cover today comes separately through Pradhan Mantri Jeevan Jyoti Bima Yojana.

Can I upgrade a PMJDY account to a regular one later? Yes, ask your branch to convert it once you are comfortable maintaining a minimum balance.