Top 10 Reasons Why It is Important to Have a Savings Account

Updated on: 01 Feb 2024 // 4 min read // Saving Account
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Savings form an important part of everyone’s life. Whether you are a working individual, a student, a housewife, or a retired person, you must incorporate the habit of savings in your daily routine. Once you have inculcated this habit, you will yourself see your personal finances in a more organised manner. One of the most effective and easiest ways of incorporating the habit of savings in your routine is through opening a Savings Account.

About Savings Account

A Savings Account is a facility extended by banks and post offices for their customers. These bank accounts can be opened only in the name of individuals only. Money kept in the savings account earns interest, thereby offering a reliable source of income. A Savings Account is thus one of the most popular forms of bank accounts and is highly sought after by individuals.

Interest on Savings Accountis calculated and credited to the account on a quarterly or half-yearly basis. Most Savings Accounts come with useful facilities which enable account holders to conduct transactions easily. Some of the basic facilities available with a Savings Accountare: –

  • Passbook
  • Chequebook
  • Debit Card
  • Internet Banking
  • Life Insurance
  • Accident Insurance

Moreover, to avail the benefits and schemes offered by the government, it is essential for an individual to have a Savings Bank Account.

Types of Savings Accounts

Savings Accounts can be further categorized into various sub-categories according to the benefits offered, and charges levied. Some of the popular categories of Savings Account are:

  • Regular Savings Account
  • Zero Balance Savings Account
  • Senior Citizen Savings Account
  • Jan Dhan Account
  • Minor Savings Account
  • Salary Account
  • Women’s Saving Accounts

Charges levied and facilities offered to vary according to the type of savings account and the banks’ policies.

Why must you have a Savings Account?

Opening a Savings Account offers many benefits to the account holder, which makes it a must for every individual. If you have not already opened a Savings Account, then you should open one now in order to avail the following benefits:

Safe Avenue to Park the Funds:

Savings Bank Account offers you a safe avenue to park your surplus funds. You can make withdrawals or deposit money into your Savings Account easily. This removes the need for you to keep cash on you all times and also relieves your tension regarding possible theft of cash. You enjoy great flexibility and security for your funds with a Savings Bank Account.

Avail Digital Banking Services:

With the recent push by the government for digital payments, the attractiveness of a Savings Account has increased manifold. With a Savings Account, you can enjoy the digital banking facilities such as Internet banking, NEFT, RTGS, IMPS, UPI, etc. This allows you to operate your account without any need to visit the bank branch.

The Benefit of Government Schemes:

In order to avail the benefits of government schemes and receive subsidies, it is essential for you to have a Savings Account. To remove the middlemen, the government is pushing direct benefit transfer of schemes, and you can receive your benefits only through a Savings Account. Many banks offer a Zero Balance Saving Account as well, which are free from any obligation to maintain an appropriate balance in the account.

Send and Receive Payments:

With a Savings Account, you need not go to someone’s place to receive or make a payment. You can directly make the payment to the beneficiary’s bank account or receive the payment in your account. This allows you to handle the payments without any worries conveniently.

Interest Income:

Spare cash lying around your home is not going to generate any income. Whereas, if this money is kept in a Savings Account, not only will it be safe but will also generate income for you in the form of interest. Rate of interest on Savings Accountvaries for each bank. Some banks offer 4% interest while some offer up to 6% interest per annum.

Financial Planning:

A Savings Account can help you plan your finances properly. By offering you a clear picture of your savings, a bank account can help you understand your financial standing and thereby allows you to plan your investments. You can use the Savings Account to keep your money safe while you identify suitable investment schemes.

No Need to Carry Cash:

All Savings Accounts come with the facility of a Debit Card. This allows you to make purchases without a need to carry the cash. Many vendors offer various discounts and schemes on making payments through Debit Cards. Moreover, with an extensive ATM network present across India, you can readily withdraw cash from your account.

Proper Record of Spending:

If you have the habit of using cash for your transactions, it becomes impossible to keep a record of the same. Whereas, with a Savings Account, all your receipts and payments are properly recorded. This helps you understand your finances better and keep a proper track of the same.

Online Shopping:

With the rising popularity of online shopping, you must be also inclined to indulge in the same. Having a Savings Account allows you to make purchases for your daily needs, travel needs, or entertainment needs easily from your smartphone or computer. You can avail various discounts, cash back and offers with the help of your Debit Card or Internet Banking facility.

Independence from Debt:

Savings Account plays an important role in keeping you away from any debt. You do not get a false sense of security with your finances, as happens with the usage of Credit Cards and other forms of instant loans. Instead, you learn to be wise with your spending and stay within your means with your Savings Bank Account.

With so many benefits on offer, there is no reason for you to delay opening a Savings Bank Account immediately.