One of the most popular offerings from banks, a savings account is a need. This account can be used for various purposes. With digitalization coupled with Government’s initiative to open bank accounts for every individual, this is why it’s important to open a savings account:

  1. An avenue to save
  2. A savings account is one of the most prudent avenues to save. Cash-in-hand tends to slip out quickly and this can be prevented with the help of a savings account. You can use this account to save for any emergency that might crop up in the future.

    Since this account gives you the liberty to deposit and withdraw as per your needs, it’s an ideal way to save for your varied needs.

  3. Highly liquid
  4. This is another major benefit offered by a savings account. You can withdraw from your savings account whenever needed either through cheque, debit card or a withdrawal slip. It comes handy in an emergency or even otherwise.

    For instance, if you need to pay a premium for your insurance policy ASAP, you can easily withdraw money from your savings account and make the required payment. If you have net banking, you can also transfer the required funds when desired.

  5. Interest income
  6. Every savings account earns interest. Though the rate of interest varies across banks, it can supplement your income. Note that if you are below 60, interest income earned from a savings account up to Rs. 10,000 is exempted from taxation.

    Depending on the savings or the amount of money you have in the account, the interest amount is automatically credited.

  7. Value-added services
  8. Today, a savings account comes with various value-added services. For instance, on making a purchase with the debit card linked to your savings account, you can earn reward points. These points can be enchased to get discounts on future purchase or booking tickets for purchase.

    Also, many banks offer some basic form of medical or accident insurance cover with a savings account. These insurance covers come handy in an emergency. You can contact bank representatives to know if there are any such covers linked with your savings account.

  9. Security
  10. Cash lying idle at home is prone to several risks. On the other hand, if you put it in a savings account, it’s relatively safe. The onus is on the bank to ensure safety of depositors. Note that a deposit up to Rs. 1 lakh is insured from the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Also, if the bank undergoes liquidation or bankruptcy, deposits up to Rs. 1 lakh are insured. Thus, a savings account offers security to your hard-earned money. Opening a savings account is quite easy. Visit branch of any bank, fill up the account opening form, and submit the relevant documents and you are done.

Learn more about Mutual Funds for a good personal financial management.

DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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