A savings account is one of the most important financial products you should have when you start your financial journey. It helps you keep your money safe and earn a modest interest rate. You can easily deposit or withdraw your money in your savings account.
Having a savings account helps you access your money whenever in need. It is an emergency fund that you can use when you need money. However, a savings account is not an investment, so experts suggest keeping only the surplus funds in it. You can park the money in your savings account for your short-term needs.
Before opening a savings account, one must perform all due diligence about the interest rates on savings, minimum and maximum balance requirements and zero balance penalties. Also, check for other charges you may incur to avail services like cheque book, ATM withdrawals, and cash deposit, among other services you might get with your account.
Senior citizens can earn higher interest rates on their money deposited with the bank and when they park their money in fixed deposits. Here are some of the key benefits of having a savings account.
- A savings bank account is safe for keeping surplus funds.
- You earn interest on the balance in your savings account
- Interest rates can range from 3% to 6.50% p.a.
- You can use ATMs with your debit card across India
- Internet banking and mobile banking
- Discounts on the locker rental facilities
- Some banks offer insurance covers, including personal accidents and death cover
Adhil Shetty, CEO, Bankbazaar.com, says, “A savings account holds your money safely besides giving you interest on your deposits. There are private and government banks where you can deposit your money besides cooperative banks and post offices. The type of savings account you have decides the facilities you will get on it. Knowing about your bank account and the services you can avail of is good. Banks regularly send Emails and newsletters to inform their customers about the benefits and new updates. You must keep abreast of new banking regulations about benefits and new requirements.”
Further, you must not let your savings account remain idle without any activity. The bank may freeze your account in case your account remains idle for too long or key information is not updated by you as per the bank’s instructions.
A savings account is a very useful tool. You must know how to make good use of it.