Savings account serves many purposes as a banking tool for achieving personal finance goals for consumers. Consumers use savings account as a place to deposit money safely so that it can be used at later stage for purpose of managing expenses, investment, protection and creating saving for contingency and consumption needs. In today’s day, banks offering higher interest rate savings account has also become an key investment offering.
A savings account gives seamless access to numerous investment avenues across broad spectrum and allows to investment smaller amounts on monthly mode, depending upon your financial goals and objectives.
In this article, we will give you valuable insights into the importance and features of Savings Accounts. Please stick to the end of the article to know more about it.
Savings Account – An Overview
A Savings Account is nothing but the most simple bank account that enables people to pool their finances and manage them efficiently. Here, you have the opportunity to easily withdraw your funds anytime you desire.
While customers have different kinds of needs and requirements, many banks offer different types of Savings Accounts. All of them are exquisitely designed to meet the various needs of the customers.
What are the Features of a Savings Account?
Here, we have made a comprehensive listing of the most commendable features of a Savings Account:
- It usually comes with a chequebook and a passbook.
- Savings Accounts usually earn low rates of interest, however there are banks which provide higher savings interest rate as much as 7.25%, savings account allows instant access to the account holders funds through various modes like Debit Card, Cheque Net Banking and Mobile banking.
- You can make and receive payments easily in your Savings Accounts.
- You can access both mobile and internet banking as and when required.
- Banks provide ATM cum debit cards to all savings bank account holders.
- Savings account enables all your daily financial transactions, like basic daily purchases, petty expenses to your local grocers, shops etc.
- Savings account through their Debit card offers, give excellent deals and discounts on various purchases be it Digital gadgets, or daily groceries, right from travel to entertainment. Some of the premium banking savings account give access to Lifestyle offers and give access to Premium lounges at Airport, Golf Courses as such
- You can set the amount for auto debits and auto credits for your Savings Accounts.
- The high interest Savings Account allows you to achieve long-term financial goals.
- You can easily pay your monthly rent and bills from your savings bank account.
What is the Importance of a Savings Account?
Even though there are other attractive investment sources than a Savings Account, it can provide you with remarkable benefits. Some of the most compelling reasons why a Savings Account is important is listed here:
- Income Generating Account
Unlike a current account, a savings bank account earns interest. Even though the Savings Account interest rates are low, you can still earn some balance. This is a remarkable way to improve your income.
Certain banks provide higher rates of interest when you maintain a higher balance in your Savings Account. On the other hand, some offer sweep-in facilities that help you earn higher interest income of up to 7.25%
Therefore, it will automatically pave the way for you to achieve your long-term financial goals. And you will have no pending debts against your name.
- Easy Payment Option
A Savings Account is a fantastic place where you can easily collect funds from different sources. Since the number of cheques deposited or issued from a Savings Account is limitless, you can seamlessly collect funds and make payments.
- Save for Your Future
Since you can easily store money in your Savings Account, you can plan and save for your future. For instance, if you hold a Savings Account with a high-interest rate, then you will have an additional source of income. And this way, you can easily save for a down payment or for your golden days.
Savings Accounts pave the easiest ways for you to earn interest on the money you possess. Most banks and financial sectors provide higher interest rates, making it extremely easy to spend and withdraw money.
If you have any queries or require more information on Savings Accounts, you can get in touch with AU Small Finance Bank. They will help you open a Savings Account and guide you through all other procedures.
Frequently Asked Questions
- What are the different types of Savings Accounts?
Most banks and credit unions usually provide four common types of Savings Accounts that anyone can buy. They are high-yield Savings Accounts, traditional Savings Accounts, money market accounts, and certificates of deposit.
- Why is savings considered an important part of a financial plan?
Everyone needs to start saving their money at some point or the other. This is likely to improve your financial situation over time. When you start saving money, it also gives you peace of mind. Furthermore, it becomes easier for you to accumulate additional savings.
- What are the primary goals for saving money?
The primary savings goals that you should prioritise over everything else are: paying off debt with high interest, your emergency fund, and your retirement fund.
- What is the best way to save for long-term financial goals?
Some of the best techniques to save for long-term goals are:
- Investing in a retirement account
- Exploring passive income opportunities
- Opening separate accounts for other long-term goals, etc.
- What benefits will you gain from saving money?
Saving money will protect you in any case of financial emergency. Besides, it will help you to avoid debts and pay for enormous purchases. Saving money will provide you with a financial legacy, thereby reducing your financial stress. Saving money will provide you with extensive financial freedom.