A savings account is an account that has been held at the bank or financial institute that provides a fair amount of interest to the customer. The primary intention of the savings account is to keep money that you don’t use on a daily basis. The bank can put a limit on withdrawal of money on your account each month. However, people underestimate the importance of savings account and eventually face a financial setback in the future. So, let us see why savings account is essential.
Why is Savings Account important?
A savings account is a primary step to accumulate a healthy sum for the future. It is not only important to achieve long-term goals, but it can help you achieve short-term goals such as renovation or minor repairing of the apartment.
- Unexpected spending
We can never predict the future expenses, so you have to be ready for such unforeseen events. The events like a broken appliance, major maintenance of the car; educational expenses can put a dent in your monthly budget. Saving accounts help you in such scenarios providing you financial stability.
- For future goals
We plan for some long-term goals for which we need money in the future. The savings account money will help you achieve post-retirement goals. Even before retirement there are different goals where you will need a hefty sum and compromising the monthly budget for that is not an option.
- Make more money
If you can handle a high-interest rate account, then you should definitely go for it. In simple words, your money will be making more money for you by just staying there. The more you invest; you are likely to get more interest.
That is why maximum savings is necessary as it helps you achieve your financial goals. However, some banks will charge specific fees if the customer does not maintain a minimum balance. Sometimes it becomes difficult for customers to maintain the minimum balance. For them, banks provide ‘zero balance savings account’. So what is zero balance account? It is a saving account where minimum, i.e. zero balance is maintained as the banks are given subsidies. In India, these accounts come under Pradhan Mantri Jan Dhan Yojana. Let us see its features.
- There is no condition to maintain a minimum monthly balance. It can go down to zero.
- The complementary passbook is given to the account holder at the time of opening along with the welcome kit.
- Banks do not charge the account holders for the use of ATM and debit cards.
- Almost all banks offer free net banking to the zero balance accounts.
- For salary account holders, the bank will provide special facilities based on the company and the institutions.
- In addition to that, there are no charges on cash deposit transactions, free cheque and passbook every year.
Be it long-term goals or just monthly saving; savings account has multiple benefits. It is easy to handle and hassle-free. Plus, zero balance savings account can help the people who find it challenging to maintain a minimum balance.