Savings accounts are more than just a place to store your money. They come with a range of features that can help you make the most of your savings and achieve your financial goals. Whether you’re new to saving or a seasoned saver, it’s important to understand these features and how they can benefit you. In this blog, we will explore the top 10 features of savings accounts, so you can make informed decisions about your money. Let’s get started and unlock the potential of your savings account!
Features of a Savings Account
A savings account has the following features:
Interest Rates
- Banks offer interest to depositors in exchange for keeping their funds with them.
- The interest rate is the amount of money paid by the bank on the amount deposited by the user.
- The interest rate offered by banks is determined by the amount deposited in the account and can be impacted by the Reserve Bank of India’s (RBI) banking policies.
- Interest rates can vary between different banks.
Minimum Balance Requirement
- Many banks require savings account holders to maintain a minimum balance in their accounts.
- Some types of savings accounts, such as salary savings accounts or zero balance accounts, may not have a minimum balance requirement.
- Failure to maintain the required minimum balance may result in a penalty.
Withdrawal Flexibility
- A savings account allows you to withdraw money at any time and from any location.
- The bank sets the limits on how much money you can withdraw and how often you can make withdrawals.
ATM Facility
- You can easily withdraw money from your savings account using an ATM card or debit card at any ATM.
- Some banks may charge a small fee for using another bank’s ATM to withdraw funds after a certain number of transactions.
- It is important to note the fees and restrictions on ATM usage when using your savings account.
Debit Card
- Most savings accounts come with a debit card.
- Debit cards allow you to withdraw money from ATMs and make payments online and in-person.
- To make a transaction, you need to enter your credentials.
Passbook and Cheque Book Facility
- Most banks provide a passbook and a cheque book when you open a savings account.
- The passbook records all your financial transactions and activities, while the cheque book allows you to easily withdraw or deposit funds.
No Age Bar
- There is no age restriction on who can have a savings account.
- Different types of savings accounts have their own eligibility requirements and benefits, suitable for people of all ages.
- Children over the age of 10, senior citizens, and people with a salary can all open a savings account if they meet the required criteria.
Internet Banking
- A savings account allows you to conduct banking transactions online.
- You can use a bank’s mobile banking app or internet banking to perform various functions, such as sending and receiving money, paying bills, investing in stocks, choosing insurance or other investment options, and ordering a cheque book.
- These services can be accessed online, eliminating the need to physically visit a bank branch.
Account Tenure
- Savings accounts do not have a time limit and can be maintained for as long as the account holder wishes.
- If a savings account is inactive for two or more years, it may be classified as an inactive account by the bank.
- In this case, the account holder will need to contact the bank to reactivate the account.
Easy Exit
- You can close your savings account at any time by visiting your bank in person.
- Online closure is not possible, so you must visit a branch.
- If your account is dormant, it must be reactivated before it can be closed.
FAQs
What is the tenure for a savings account?
You have the freedom to manage and maintain your savings account according to your preferences and for as long as you feel it is feasible. There is no time limit or restriction on the duration for which you can hold the account.
What are the main features of savings accounts?
The main features of savings accounts include earning interest on your balance, providing easy access to your funds, offering safety and security for your money, convenience through online and mobile banking, and the ability to set savings goals and automate transfers.
What is a characteristic of a savings account?
One characteristic of a savings account is that it allows you to earn interest on the money you deposit. This means your savings can grow over time, helping you reach your financial goals.
What is the risk of a savings account?
The risk of a savings account is generally very low. Unlike investments, savings accounts are not subject to market fluctuations, making them a safe and stable option for storing your money.
Is a savings account good or bad?
Savings accounts are generally considered a good financial tool for individuals looking to save money. They provide a secure place to store funds, earn interest, and offer easy access to your money when needed. However, it's important to consider your specific financial goals and needs to determine if a savings account is the right choice for you.
