Why Savings Account is important for you

The most basic type of bank account is the savings account. It is an account that enables you to consolidate and control your finances. In response to the different wants and expectations of customers, banks started offering different types of savings accounts. You are completely free to withdraw your money from the savings account and you can withdraw the money at any time.

Savings account features include:

  • A savings account has a passbook and a checkbook.
  • Your savings accounts allow you to receive and make payments.
  • You can set up automatic debits and automatic credits from your savings accounts.
  • A savings bank account offers a nominal interest rate (3-4%).
  • The customer has the freedom to withdraw funds at any time subject to monthly withdrawal limits.
  • Banks provide ATM and debit cards to owners of savings bank accounts.
  • Owners of savings bank accounts have access to online and mobile banking for their needs.
  • It is possible to use your savings account to pay bills.
  • Banks also send transaction alerts to their customers by SMS and email.

Benefits of Savings Account

Even though a savings account is very useful, it generates interest at the rate of 3% to 5% annually. Is there any benefit of opening a savings account in this situation? Yes, there are many benefits of opening a savings account. Let’s know about them:

easy access to cash

Savings accounts are usually opened with an ATM card or checkbook, so that individuals can easily withdraw money when needed and do online transactions.


One of the benefits of opening a savings account is that it provides you with liquidity. Money in a savings account is easily accessible and can be used for unforeseen expenses, emergencies, etc.

Rate of interest

A savings account usually earns interest on the amount deposited, which means that the account balance will grow over time. Usually the interest rate on savings account is between 3-4% and this is the rate going on at present.

money security

A savings bank account is a safe way to keep your money safe in a bank rather than keeping it at home where it is less likely to be lost or stolen. Each account is insured by the Deposit Insurance and Credit Guarantee Corporation for up to Rs 5 lakh.

Additional income due to auto sweep facility

Most banks have an auto sweep facility, where funds above a particular limit are automatically converted into fixed deposits. These funds earn interest at fixed deposit rates as compared to the regular savings rate. By enabling this facility the depositor can get the full benefit of keeping the money in the savings account.

automatic debit for payment

Banks allow customers to set up automatic debit for utility payments and bills. It is a convenient way to make timely payments. When you avail the loan, you can set up an auto debit facility from your savings account where the installment will be debited from the savings bank account.

joint account facility

Opening a Joint Savings Account Having a joint account provides more flexibility as all the joint holders can sign checks and operate the bank account. This makes it easy to track expenses and income. A joint account can be maintained for household income and expenditure which is excellent for financial planning.

Convenience & Savings

Many banks offer online banking and mobile apps, making it easy to manage your savings account from anywhere. Having a savings account makes it easy to save money and achieve financial goals.

Convenient Fund Transfer

Transferring funds from savings account is very easy. There are various modes of fund transfer which are easily available in both internet banking and mobile banking. A savings bank account holder can transfer funds using NEFT, RTGS, IMPS and UPI.

auto credit for investment

One advantage of keeping money in a savings account is that it can be linked to a demat account and other investments. In such cases, the dividend and interest income is automatically credited to the bank account. This facility ensures that all the income is deposited in one account.

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