There are several types of savings accounts, such as salary savings accounts, child savings accounts, and zero balance savings accounts, each of which offers its unique benefits. However, there are also some benefits that these accounts have in common. Continue reading to learn more about the advantages of opening a savings account.
Benefits of a Savings Account
Following are the benefits of a savings account:
Emergency or Safe Funds:
- A savings account is a type of bank account where users can deposit money and earn interest on it.
- Banks pay interest on savings accounts in exchange for holding the deposited funds.
- Savings accounts provide a safe place to store money, as users don’t need to carry cash physically.
- Savings accounts are a good option for people who want to make regular transactions or need to access their money quickly.
Liquid in Nature:
- A savings account allows you to easily access your money through an ATM or debit card
- The account is “liquid,” meaning you can withdraw funds at any time.
Online Facility:
- With internet banking, users can access a range of financial services online, including sending and receiving money, making investments, and ordering cheque books.
- Online banking allows users to apply for additional services, such as fixed deposit investments, loans, and credit or debit cards.
- Users can conduct transactions without incurring a daily transaction fee.
- Internet banking makes it convenient and easy to manage a savings account without physically visiting a bank.
Automatic Debit Payments:
- Many banks allow you to set up automatic debits for utility bill payments
- The utility provider will request payment from the bank on a specific date
- The bank will then debit the amount from your account
- Automatic debit is a convenient option for those who tend to forget to pay bills on time
Fund Transfers:
A savings account enables you to transfer funds through various payment methods, including:
- Net banking
- Mobile banking
- NEFT (National Electronic Funds Transfer)
- IMPS (Immediate Payment Service)
- UPI (Unified Payments Interface)
Joint Accounts:
- A joint savings account allows multiple account holders to manage one bank account and sign cheques together.
- This type of account can be used for managing household expenses or for personal use.
- Joint savings accounts provide a convenient way for family members to manage their finances together.
International Debit Cards:
- Some banks offer international debit cards to customers who open certain types of savings accounts.
- International debit cards enable users to make transactions and withdraw money from ATMs globally.
- These cards can be a convenient and secure way to access funds while traveling or conducting international transactions.
Easy to Open:
- To open a savings account with a traditional bank:
- Choose the type of account you want to open
- Fill out the account opening form and nominate someone if desired
- Submit all required documents along with the deposit money
- The bank will verify your documents and send a welcome kit to your registered address (verification may take 7-10 business days, but this can vary by bank)
Note: The process of opening a traditional bank account can be time-consuming
No Age Bar:
- Different types of savings accounts are available to different groups of people:
- Children/kids savings accounts: Available to children over the age of 10
- Senior citizen accounts: Available to adults over the age of 60
- Salary savings accounts: Available to salaried professionals
- Regular savings accounts: Available to all residents of the country
- It is important to choose the type of savings account that best meets your needs, as the features, benefits, and eligibility criteria may vary
- Note that to open a savings account, you must meet the eligibility requirements for the specific type of account you are interested in.
No Fixed Tenure:
- Savings accounts can be operated indefinitely, with no time limit set by the bank.
- If an account is inactive for more than two years, it will be considered inactive and may require reactivation by the account holder.
- It is up to the account holder to decide how long they want to operate their savings account.
Closing the Account:
- Savings accounts can typically be closed in person by visiting a bank branch and speaking with a representative.
- To close a savings account, you may need to follow certain instructions and submit required documents.
FAQs
Is there any fixed tenure to operate a savings account?
No, you can keep your savings account open for as long as you wish, with no set time frame for management.
Can I open a savings account at a different bank?
Yes, to open a savings account at another bank, you need to provide the required KYC documents and complete the account opening form. The bank will verify these documents during the account opening process.
Is it possible for me to open a salary savings account?
Salary savings accounts can only be opened by employers for their employees.
Is it possible to withdraw money from a savings account at any time?
Yes, savings accounts are designed for easy access and can be withdrawn from at any time and from any location, making them a convenient and liquid option for saving and managing your money.
