Using savings account for crypto trading can terminate your account!

[Bitcoin Smith]

I noticed someone on reddit made a thread that his bank reached out the person regarding the transactions such as deposits and he said it's from his buy/sell crypto then the other person replied that usage of savings account is prohibited for any business related purpose and bank has the authority to freeze/terminate the account too.

Then I reached RBI guidelines of savings account where they actually mentioned it. Checkout the image below



Savings Bank Accounts Rules & Regulations

So my follow-up question is crypto trading is considered as business?

[Bravut]

I think this depends on your country policy, if your country doesn't permit such, your account will be freeze. But they only know about it when you write crypto or any related information as the description of the transaction.
You need to be careful, and act within your country monetary policies.

[Bureau]

snip~~

In Indian crypto trading is not considered as a business. Nor, stock trading is considered as a business unless you are a broker. I do not think there should be any issues related to saving bank account being used as a way to credit your profit through crypto trading. I think this guy might have been spooked due to largely bank accounts still getting frozen after P2P amount gets credited. He is trying to relate that issue with saving account being used for trading purposes. Which I don't think is relatable as P2P bank account freeze is a completely different issue.

[pawanjain]

I don't think crypto trading or making P2P transactions using savings account can be considered as a business.
In this case, banks cannot reserve the right to freeze our bank accounts. The only reason banks can freeze our account is when we are doing illicit activities using our bank account.
Money laundering, credit card fraud, scamming others etc... are some reasons why banks freeze our savings account and not merely for crypto trading.

[Bitcoin Smith]

I think this depends on your country policy, if your country doesn't permit such, your account will be freeze.

This is Indian board, so basically anything we talk related to country India

In Indian crypto trading is not considered as a business. Nor, stock trading is considered as a business unless you are a broker.

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I am not quite sure about this part because I made some quick search and IT department states that any activity that's done with the intention of making profit is considered as business.

I do not think there should be any issues related to saving bank account being used as a way to credit your profit through crypto trading. I think this guy might have been spooked due to largely bank accounts still getting frozen after P2P amount gets credited. He is trying to relate that issue with saving account being used for trading purposes. Which I don't think is relatable as P2P bank account freeze is a completely different issue.

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AFAIK, the account didn't froze but the user transaction has been questioned by the banking side which is common though when we receive amount that's huge considering our average account balance and activity but the savings account can't be used is quite new to me.

I don't think crypto trading or making P2P transactions using savings account can be considered as a business.
In this case, banks cannot reserve the right to freeze our bank accounts. The only reason banks can freeze our account is when we are doing illicit activities using our bank account.
Money laundering, credit card fraud, scamming others etc... are some reasons why banks freeze our savings account and not merely for crypto trading.

I have been using my savings account ever since and I had no problem at all because I use the account for other TXs too, so the amount might get mized up and I always been keen on not to convert any huge amount even anything over 50K.

[avikz]

I don't find any difference between stock trading and crypto trading. So when we are allowed to continue stock trading using savings bank account, the same should apply for crypto trading as well. I don't see any issues in that.

But the entire crypto scenario is very confusing in India. So I won't be surprised if the bank deactivates anyone's account for cryptocurrency trading. But ideally they should not do that.

[Bitcoin Smith]

I don't find any difference between stock trading and crypto trading. So when we are allowed to continue stock trading using savings bank account, the same should apply for crypto trading as well. I don't see any issues in that.

But the entire crypto scenario is very confusing in India. So I won't be surprised if the bank deactivates anyone's account for cryptocurrency trading. But ideally they should not do that.

It's better to avoid disclosing that we are receiving funds from the crypto trading platforms to the banking employees, cause employees may not aware of everything and they could just do what they thing is right and making them to realize its their mistake is actually big task, so unless we stuck in the situation we need to tell them, just keeping the mouth shut is good for us.

[Bureau]

I don't find any difference between stock trading and crypto trading. So when we are allowed to continue stock trading using savings bank account, the same should apply for crypto trading as well. I don't see any issues in that.

But the entire crypto scenario is very confusing in India. So I won't be surprised if the bank deactivates anyone's account for cryptocurrency trading. But ideally they should not do that.

It's better to avoid disclosing that we are receiving funds from the crypto trading platforms to the banking employees, cause employees may not aware of everything and they could just do what they thing is right and making them to realize its their mistake is actually big task, so unless we stuck in the situation we need to tell them, just keeping the mouth shut is good for us.

That is in a way a right thing to do but as a bank every transaction made by anyone are monitored by the internal system for security reasons. I am sure a bank will know that funds are being credited from a local exchange or being debited towards a local exchange. In terms of P2P if the number of transactions goes up and if it triggers internal audit system then the account holder will be asked about the source. In that kind of a situation an account holder will have to inform from where the funds are coming in or going out.

[avikz]

I don't find any difference between stock trading and crypto trading. So when we are allowed to continue stock trading using savings bank account, the same should apply for crypto trading as well. I don't see any issues in that.

But the entire crypto scenario is very confusing in India. So I won't be surprised if the bank deactivates anyone's account for cryptocurrency trading. But ideally they should not do that.

It's better to avoid disclosing that we are receiving funds from the crypto trading platforms to the banking employees, cause employees may not aware of everything and they could just do what they thing is right and making them to realize its their mistake is actually big task, so unless we stuck in the situation we need to tell them, just keeping the mouth shut is good for us.

Absolutely! Not a single employee within banking system are to be trusted! Also, try to avoid big value transactions at all times, unless it's an emergency! keeping the amount low actually helps to avoid the internal banking surveillance system. Also the amount has to be at per your monthly income. I mean, if you earn a salary income of 50,000 a month, keep your crypto transactions within 10-25k. If you suddenly receive a credit of 3 lakh rupees, that would raise suspicion. 

So keeping a low profile actually helps to avoid issues within banking channel!