Are you looking for a secure place to store your funds while having full access to them during emergencies? Or are you searching for a great means of short-term investment through earning interest rates on your savings? If this is the case, a savings account will provide you with all this and many more facilities!
A personal savings account is an interest-generating deposit account that builds a yearly interest rate on your savings. This safe and reliable method is the first step towards financial freedom for an individual!
Still not sure about opening a savings account? Take a look at this list of six major benefits of a savings account.
What are the Benefits of a Savings Account?
Before opening a savings account, you should always weigh all the benefits it will provide. This short-term investment plan is beneficial for many reasons, making it a wide choice of investment for beginners.
Here are all the reasons why you should get started with one:
1. Extreme Liquidity
High liquidity here refers to accessibility. In case of emergencies, you would always prefer to have access to cash. A savings account provides you with that convenience. With one, you are not bounded by a time period. Here, you can withdraw your funds anytime without penalties for early removal. So, when it comes to high liquidity for funds, no other investment plans can beat a savings account.
2. Top Safety
A savings account is a type of investment known to carry lesser risks than other forms of investments. It provides complete security because the Reserve Bank of India has strict regulations for money safety. Even digital savings accounts have to follow online safety protocols.
3. Seamless Transactions
Net banking has made it easier to make and receive payments without withdrawing money physically. It is more accessible to transfer funds through NEFT, RTGS, or IMPS via your savings account. Since everything can happen digitally now, making deposits or dropping cheques is a hassle-free concept with a savings account.
4. Quick Loans
One of the major benefits of having a savings account is that it smoothens the process of getting a loan from the bank where you have opened a savings account. Since you already have a bank history with them, it will be easier to access a loan.
5. High Interest Rate
Today, many banks offer savings accounts with up to 4% interest rates. Moreover, some even provide digital savings accounts with a high interest rate of up to 7%. All of this is an excellent reason to open a savings account!
6. Access to Debit Cards
Without a savings account, you won’t have a debit card. Debit cards are one of the easiest tools to access major financial facilities like shopping, bill payment, etc. You can instantly link your card to e-payment or UPI facilities to make transactions directly from your savings account. They are beneficial for making instant payment services. Hence, a savings account is a must to make convenient and faster payments!
Choosing the Right Savings Account for You
Now that you know all the available benefits of a savings account, you might be wondering where to get started and which bank is suitable for you? You should understand that every digital bank or financial institution has something different to offer with their savings account.
For example, some banks give high interest rates, while some digital banks focus on a zero-balance requirement. Moreover, there are a few that focus on providing both! Hence, it all comes down to what you truly need. Ensure you do your research. Compare different banks and their savings account models and go for the one that aligns with your goals!
Author Bio:
Naina Rajgopalan has a thing for numbers and a deep facication to learn about all things finance. She's been money-wise from a young age and has always shared her knowledge and tips with those around her. Being a part of the content team at Freo Save, a neobank that offers a 7% interest rate on savings along with benefits such as insurance on balance, safe & secure banking, and so on, Naina stays updated with the latest of what happens in the banking and fintech industries. She has taken upon herself to share her knowledge with readers across all walks of life to help them manage their finances and budgets better, so they can make better decisions while spending, borrowing, investing and saving.