A savings account is a financial product that individuals need to have while starting their financial journey. It is a secure place to store funds and provides a modest interest rate. The account facilitates easy deposits and withdrawals, ensuring that access to your money is straightforward.
Maintaining a savings account enables you to retrieve funds as needed, serving as a financial safety net during emergencies. However, it is important to note that a savings account is not intended for investment purposes. Therefore, financial experts recommend maintaining only surplus funds in this account.
Savings accounts are suitable for short-term financial needs. However, before opening a savings account, conducting thorough research regarding interest rates, minimum and maximum balance requirements, and any penalties associated with maintaining a zero balance is essential.
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Also, it is best to ask about potential fees for services such as checkbooks, ATM withdrawals, and cash deposits, among other account-related services. Senior citizens can also earn higher interest rates on their deposits, particularly when their funds are in fixed deposits.
Below are some of the primary advantages of having a savings account.
* A savings bank account provides a secure option for keeping surplus funds.
* It allows you to earn interest on the account balance. According to Bankbazaar, interest rates on savings accounts typically range from 2.60% per annum to 8.00% per annum, depending on the balance maintained in the account.
* You can access your funds conveniently through ATMs using your debit card throughout India.
* Additionally, internet and mobile banking services are available, along with discounts on locker rental fees.
* Auto debits and auto credits can be set up from your savings account.
* It is possible to pay bills from your savings account.
* Some banks also offer insurance coverage, which may include personal accident and death benefits.
A savings account, thus, not only safeguards your funds but also helps you earn interest on your deposits. You can choose to deposit your money in private or government banks, as well as cooperative banks and post offices.
The specific type of savings account you select will determine the services available to you.
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