Once you start earning, the first account you open is a Savings Account. Whether you are opening an account for a minor as a parent or guardian or a Regular Savings Account, it develops financial discipline. It lets you save money while you are young. Yet, most use the accounts for basic transactions like cash deposits and withdrawals as they may be unaware of their uniqueness.
Following are the reasons why Savings Accounts stand out:
Easy transactions
The best part about modern accounts is they are accessible anytime, anywhere. This attributes to the fact that all banks today operate digitally. You get the Online Banking account details through the welcome kit, and you can access the account on the bank portal or the Banking app. It lets you send and receive payments quickly.
Bill payments and online shopping
You use the Bank Account to pay all your utility bills. They are done as cash, cheque, or online transactions. Use online channels to pay for your shopping orders, eliminating the need for money.
Debit or ATM Cards
The moment you open Bank Account online, your bank sends a welcome kit. This kit includes your Online Banking details and a Debit or ATM Card. Those who are not so tech-savvy and cannot complete online transactions use their Debit Cards to withdraw cash. They use it to shop online and in retail stores, and the money gets directly debited from your account.
Balance maintenance
This is essential feature customers need to check before they online Saving Account opening. Banks prescribe the minimum amount to park in the account, failing you get charged a penalty for non-maintenance. If you hold an account in a public sector bank, you may need to maintain up to Rs. 1,000.
Private sector banks, meanwhile, need you to maintain a minimum balance between Rs. 10,000 to Rs. 1 lakh. Some accounts require no balance maintenance.
Interest rates
Your deposits earn you reasonable Savings Account interest rates. Depending upon the bank where you hold the account, the amount parked, and the balance maintained, you can make decent interest rates on them. While the interest rate is not that high, banks also provide a bonus and disburse it once or twice a year. The interest rates go up to 7%.
Deposits and withdrawals
There are no limits on the money you can deposit in your account. However, banks do have a limit on the withdrawal amount and the withdrawal frequency. You can do up to five withdrawals a month. ATM withdrawal limits are also on your bank ATM and other ATMs three to five times a month. You get charged a small fee if you use other bank ATMs over the free prescribed limit.
Savings Accounts stand out for the listed reasons. If operated responsibly, your account could be the first investment instrument that boosts your corpus.
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