A savings account is often not a complicated banking tool. You open an account, deposit funds into it, and then observe interest grow. However, savings accounts are more complex than you would realize. Numerous savings accounts kinds provide a wide range of opportunities for money growth.
What is a savings account?
As per savings account definition, it is an interest-earning deposit account that enables customers to save money. Although funds in savings accounts are typically simple to access, banks don’t permit the enormous amount of liquidity available with checking accounts. In many instances, money can only be taken out of a bank or an ATM machine a maximum of six times per month.
Facts you might not know about a savings account
Automated bill payments
We could set up an automatic withdrawal from our savings account to cover our monthly mobile bills. We can eventually add automatic payments to a variety of bills. This includes bills such as utility bills, and even EMIs (equivalent monthly installments) to our savings account.
Sweep in facility
A savings account and a fixed deposit account are combined in the auto-sweep facility. So, it benefits from having both facilities available. Your savings account is connected to a fixed deposit account with an auto-sweep account, and a set spending limit is established. As a result, anytime the account balance rises beyond that predetermined amount, the extra money is immediately transferred to the fixed deposit. By doing this, you can increase the interest rate on the money in your savings account beyond what it would have been earning if it were just sitting there.
Digital payments
We will be able to make digital payments via net banking or UPI if he has a savings account (Unified Payment Interface). So the inconvenience of constantly carrying cash will be eliminated by doing this.
Higher saving rates
If the average balance in the account is greater than Rs 1 lakh, some banks will provide a higher savings rate. You can increase the interest on the money in our account if you are financially responsible and attentive with your money.
Promotional offers
Banks frequently partner with establishments like restaurants, shopping centers, and clothes and cellphone companies. You are eligible for these reductions if your savings account satisfies the bank’s requirements.
Insurance
A bank may cover each depositor/retail client for up to Rs 5 lakh in total, including principal and interest. In addition to this, some savings accounts include depositor life insurance. If Kabir is eligible for the same, he should verify with his bank. Debit cards must be insured by banks in case of theft or misuse.
Tax returns
All earnings, expenses, and investments will be recorded in your savings account. This will simplify the process of filing tax returns.
International debit cards
For international travel and shopping, the included international debit card from this savings account will be helpful.
Your first step in becoming investment-ready is to open a Demat account that is connected to your bank account. The ease of stock market investment is one of its advantages. Additionally, integrating two accounts results in less paperwork.
Credit card
The Bank might provide you with a credit card if you keep a healthy bank balance and a clean credit history. In addition to being practical, the card will assist you in establishing a credit history, which will be useful for borrowing.
You should consider adding savings accounts to your investment portfolio. Unlike other financial vehicles like mutual funds, equities, etc., they guarantee that your money is always available while yet offering a safe periodic return.
