What should you know about Savings Accounts?
One of the first steps towards securing your financial future is saving your hard-earned money. However, you may not know what to do with those funds. Although you can check for investment options, the lack of knowledge might work against you. Owing to this, you might lose your saved wealth. In such times, a Savings Account serves as a viable option. It is a popular banking product that pays you interest on deposits.
It lets you park your savings and increases them through interest income. The other factors you should know about the account are:
Safe investment option
Most of the investment options today are market-oriented. Hence, there are market risks involved. If you are inexperienced, investing in such avenues is not ideal. However, what is strategic is depositing your disposable income in a safe product like a Savings Account. Such accounts are not market-driven.
You should deposit funds regularly to earn the Savings Account interest rates. You need not time the market or devise other plans.
Minimum deposit amount
The deposit amount in the account is relatively low. Although it varies between banks, the holder can choose the initial deposit sum, which could be as low as Rs. 500. Therefore, anyone with a stable income can enjoy the perks of this account.
Excellent for financial discipline
To achieve your financial goals, you should maintain financial discipline. You develop this habit by depositing funds frequently into your Bank Account. Plus, the appealing interest rates encourage you to continue the practice. Over time, you learn to manage your funds systematically.
The account lets you withdraw your funds quickly. Unlike other investment channels, it provides full access to your deposited money and the interest earned. Acquiring them is also simple. Just instruct the bank about it through the website or Banking app. This way, you can withdraw your deposited money instantly. You need not fulfil additional formalities.
No lock-in period
Although a Savings Account is an investment, it has no lock-in period. A lock-in period is the number of years you cannot withdraw or sell invested funds. As the account does not have such a policy, you can withdraw, transfer, or keep the funds until you want.
Easy bill payments
From utility bills to mobile recharges, a Savings Account enables you to make payments for everything through Online Banking services. It also systematically allows you to track these payments.
Minimum balance requirement
The account needs you to maintain a minimum balance amount. This amount is the minimum amount you should always maintain in the account. If you do not maintain it, you attract a penalty charge. Thus, check with your bank about it beforehand.