Savings Accounts and its benefits
Published on: Nov 18, 2023
In today’s fast-paced world, where financial stability and security are paramount, a savings account
stands as a steadfast pillar of responsible financial management. A savings account is much more than
simply a place or cash deposit. It is a versatile tool that offers a plethora of benefits. Here are a
few features and vital benefits of a savings account.
What is a savings account?
It is a financial interest-bearing account offered by banks that allows individuals to store their money
and manage expenses. Typically, these accounts have moderate interest rates and provide easy access to
your money to fulfill short-term financial needs.
What are the benefits of a savings account?
- Emergency Fund: Opening a savings account provides you an opportunity to build an emergency
fund for unforeseen events. Having a savings account, you can set aside funds that be used during
demanding times. This way you are financially prepared for emergencies without restoring to
high-interest loans and credit card debts.
- Safety: It is a bad idea to stagnant your money at home, additionally, it is not safe and
increases risk. Whereas, keeping your money with a trustable financial institution will provide
security and you can earn interest as well. Keeping your money secured with formal banking channels
is better than relying on informal savings channels like chits, etc.
- Easy access to funds: One of the most basic benefits of having a savings account is that it
offers liquidity. When you have a savings account, you have full access to your money whenever
required. Unlike certain investment options, there are no fines and limitations on when and how you
can access your savings. Managing your expenses via a savings account also teaches you financial
discipline.
- Automated payments and incomes: Having a savings account you can set up automatic debits for
your bills and automatic credits for investment incomes. This way you can carry cashless
transactions on time along with convenience. Setting up auto debit and auto credit facilities for
your savings account will make money management much easier for you.
- Easy Fund Transfers: If you open a savings account, transferring funds will be a cakewalk for
you. Both internet banking and mobile banking make a variety of fund transfer methods readily
available. A person who has a savings bank account can transfer money through NEFT, RTGS, IMPS, and
UPI. Indulging in online transactions can reduce the risk of keeping in-hand money which can be
stolen or lost.
- Goal-Based Savings: A savings account can help you achieve specific financial goals. Certain
banks offer sub-accounts or features that let you categorise your savings which makes it easier for
you to track your progress towards savings for a specific goal. This lets a person build organized
categories to save money to fulfill financial goals like a child’s education, dream vacation, dream
home, etc.
A savings account is a valuable tool that offers a wide range of benefits, from providing financial safety
to helping you fulfill your long-term financial goals. Opening a savings account and consistently
contributing to grow it is a wise step to secure your financial future.
Sources:
https://www.investopedia.com/terms/s/savingsaccount.asp
htps://www.banks.com/articles/banking/savings-accounts/savings-accounts-advantages-disadvantages/
https://www.forbes.com/advisor/banking/savings/what-is-a-savings-account/
https://www.bankrate.com/banking/savings/what-is-a-savings-account/
https://www.creditkarma.com/savings/i/benefits-of-savings-account
