A savings account is a type of deposit account fixed at a particular rate of interest offered by a bank/financial institution. Though these accounts typically ask for a moderately high-interest rate, their safety and reliability make them a great option for saving up a certain amount of cash if the availability is required for short-term needs. Savings Account offers high transaction limits, free cheque books et cetera. You can also apply for savings account online.
A Savings Account is the most famous bank account that customers usually invest in or opt for, as the money can be used for different types of purposes. However, with the advancing time, many different account policies are coming up. A large part of the customer base is opting for those rather than the traditional savings account policies.
No matter what the career path or goal is, it is always important to open a savings account. Many banks out there offer savings accounts that can be opened without depositing a large sum of money.
As much as it is entirely up to the customer to decide which savings option they should go for, here are 5 reasons why you should open a savings account online or offline.
1. Building Wealth:
The ultimate goal you have set with your hard-earned money is to keep increasing your wealth and personal possessions. Saving your money till it turns into a large amount of worth starts by piling up single pennies you earn. Even if you want to invest in the Stock Market, Mutual Funds, Real estate, you must need a certain amount of money beforehand. If you open savings accounts online or offline, you can save the money, and with the help of the given savings account interest rate, let the money grow for the time period you want.
A savings account acts as a separate money stash that can come in for paying off your home loan or education or just for a lavish vacation. So, not only do you manage to have your money handy, but by saving every month a bit from your income, the money in your savings account, along with interest earned, would amount to a large amount in a couple of years that can be used for any purpose as per your wish.
2. Easy Access:
A savings account can make it easy for you to access your money. Not only does it increase the security, but also it makes sure that you don’t use it often on unnecessary expenditure. In contrast, if you put all your money into investments, you will not have anything when you need it most.
Savings accounts make it easy for you to access your money. It safely keeps your money for future use and also prevents you from dipping into it often. Your funds are always available for withdrawal whenever you need it. If you want to be able to withdraw money from your savings account without incurring a fee or additional charges, check your account’s terms and make sure you understand them thoroughly.
3. Emergency Fund:
An emergency fund is very important for any earning individual. Scott Sturgeon, CFP and Director of Wealth Management of Falcon Wealth Advisor, stated that,
“For example, if you lose your job, having six months of expenses in your savings account can mean the difference between missing a mortgage or rent payment and comfortable living while you find new employment.”
Unexpected emergencies have a chance of shaking up your savings-expenditure system and hinder the monthly financial calendar. Setting up an emergency fund helps you cover unexpected yet necessary expenses such as any medical emergency expense or a sudden and unavoidable personal expense. Instead of affecting the money you have with you to cover such expenses, you should consider opening a savings account and, ergo, setting up an emergency fund. By doing so, you can take care of your money wisely, more systematically and profitably.
4. Bigger Expense:
Often, there comes a time that calls for a large expenditure. This can be any type of emergency like home renovation cost or paying off a large amount of debt, or simply because you want to spoil yourself with a vacation or some expensive accessory or clothing or gadget, you have your eyes on for a long time. As much as we ask you to spend reasonably and invest or save money for more important purposes, barring you from wanting to spend a few large bucks on yourself would be inhuman.
This is where you should welcome a savings account with your arms wide open. With the money saved and the interest enjoyed at the given Savings account interest rate, you can always resort to the money saved up to a rather formidable amount. With a limited number of withdrawals, you can rely on the account for the money to be saved with higher returns.
5. Automated Transfer:
In addition to storing your cash, savings accounts can also automatically add money to your balance. A portion of your paycheck may even be automatically transferred to your savings account when you open an account with many banks. Your account becomes funded once you add money via direct deposit, and eventually, you can ask your financial institution about getting savings to account for some of that money.
This option has the advantage of allowing you to ensure that you’ll never miss the money going into your savings account, and you’ll be able to set up an automatic savings plan.
Now that you know the perks, go ahead and open a savings account online or offline. Most of the banking institutes in India offer savings account policies. So do your research, and choose accordingly.