The most fundamental type of bank account is a savings account. You may manage and consolidate your finances using this account. It is possible to withdraw the money at any moment. Banks have started to offer a variety of savings account types to cater to the diverse demands and expectations of their consumers.
Features of a Savings Account:
A savings account has the ability to hold both checks and passbooks.
Your savings accounts allow you to accept and send payments.
You can set up automatic credits and debits from your savings accounts.
Owners of savings bank accounts have access to mobile and online banking for their needs.
Banks provide customers with savings bank accounts and ATM/debit cards.
Although a savings bank account has a low interest rate, the user can withdraw money whenever they choose, up to a monthly withdrawal cap.
It is feasible to use your savings account to pay bills.
As part of their SMS banking services, banks now provide their clients with email and SMS transaction alerts.
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What Advantages Do Savings Accounts Offer?
Even if a savings account is very useful, its annual interest rate is only 3.5% to 6%. Are there any advantages to establishing a savings account in this situation? Yes, that is the response. The act of opening a savings account has numerous advantages. Let’s think about them. The following are some advantages of owning a savings account:
Cash Flow
You get liquidity when you open a savings account, which is one advantage.
• Fund Security
Instead of keeping your money on hand, where it could be misplaced or stolen, a savings bank account is a secure place to put it. Remembering that every account is protected for up to Rs. 1 lakh by the Deposit Insurance and Credit Guarantee Corporation is another crucial detail.
• Increased Profits Owing to the Auto Sweep Facility
With the auto-sweeping feature found in most banks, any funds that exceed a predetermined threshold are immediately transferred into fixed deposits. Unlike conventional savings rates, these accounts receive interest at fixed deposit rates. The depositor can fully profit from holding money in a savings account by activating this function.
• Automatic Payment Debits
Customers can set up automatic debits for bills and utility payments at banks. When this happens, the bank automatically debits the bank account after receiving a demand from the utility or telecom firm. Making payments on time is made easier using this method. You can set up an auto-debit option from your savings account to automatically deduct the loan installments from your savings account when you take out a loan.
• Auto Credits for Income from Investments
The ability to link funds from a savings account to other investments and a demat account is one advantage of doing so. In these situations, the bank account is automatically credited with dividend and interest income. All incomes are consolidated into a single account, thanks to this ease.
• Easy Money Transfers
Transferring money from a savings account is a fairly simple process. Various fund transfer methods are readily accessible through online and mobile banking platforms. The transfer of money between savings bank accounts can be done via NEFT, RTGS, IMPS, and UPI.
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• Joint Accounts
A combined savings account has advantages. Since each joint holder can sign checks and manage the bank account, having a joint account offers more flexibility. It facilitates the tracking of expenses and income. For household incomes and expenses, a joint account may be kept up-to-date, which is great for financial planning.
