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A Complete Guide to Savings Accounts

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A savings account is a type of service provided by financial institutions and banks, allowing everyone to keep their money safe. 

They offer interest on your deposits and the ability to withdraw money whenever you want. By the end of the year, what happens is that you earn interest in your savings account. 

In simple terms, it is an account to keep your money safe and secure, withdrawing it whenever you need it in the future. 

In this article, we will provide you with a complete guide to savings accounts. 

Saving Account Interest Rates

Saving account interest rates have been on the rise in recent years. This is good news for savers, as it means that their money is growing at a faster rate. However, it’s important to keep in mind that saving account interest rates are still relatively low when compared to other investment options.If you’re looking to grow your money quickly, you may want to consider investing in something other than a savings account. However, if you’re looking for a safe place to store your money and earn a modest return, a savings account is a good option.Be sure to shop around and compare interest rates before opening a savings account. Some banks and credit unions offer higher interest rates than others. Also, be sure to read the fine print so you understand any fees or restrictions that may apply. 

Savings Account Meaning 

A Savings account is an account that bears interest on the deposits you make; by opening this account in a financial institution such as a bank. 

The bank gives an interest in return for the sole reason you decide to keep your hard-earned money with them, and they give you the option to withdraw for short-term needs. 

Additionally, savings account holders need to maintain a minimum balance at all times; this amount varies from bank to bank. However, some banks do give the option of a zero-balance savings account. 

The interest paid is nominal, but it ensures your funds stay active. 

Why Open a Savings Account?

There are plentiful advantages to opening a savings account. For instance 

  • Earning interest 

The first and foremost reason to open a savings account is that it helps earn interest. The money you put in accumulates interest; even though it isn’t too high, you make it. 

  • Easy transfer of funds

Sending money to anyone in the world, anywhere, gets extremely easy with a savings account. It gives you an easy means to do this by simply using UPI, NEFT or IMPS facility. Also, you can easily keep track of all your payments, such as utility bills, rentals or shopping. 

  • Keeping funds safe

What better way to keep your money safe than opening a savings account? It can be risky to hold large amounts of money at home; it is unsafe and impractical. You need a safe place to store all your money, so you do not spend it in one go. 

  • Providing financial planning

With a savings account, you do not need to worry about spending all your money. You can manage and plan your finances to achieve your financial goals without the risk of spending it unnecessarily. 

  • Paying bills easily 

With a savings account, you can pay your bills and EMIs monthly without manually having to do it. When you link your account, the money gets directly debited and ensures that you never default on payments or forget to pay. 

  • Other benefits

A few banks offer additional benefits to savings account holders, such as a reduction in the fees of locker opening, insurance benefits and many more. 

Documents Needed to Open a Savings Account

The documents that are usually required are

  • PAN card 
  • Passport/Driving License/Voter ID
  • Passport size photographs 
  • NREGA job card duly signed by the government 
  • NPR letter

There may be a chance that official documents may not contain the exact address where you currently reside. For this purpose, you need to provide the below-mentioned documents; as proof of address

  • Utility bills(gas, electricity etc) 
  • Municipal tax receipt 
  • Proof of accommodation provided by the employer (in cases where it is relevant) 

Note: These documents may vary for NRIs(non-resident Indians), foreign-origin students and others. 

Conclusion 

A savings account provides liquidity to its customers at all times and places. Moreover, the interest that they provide to their customers makes it a good and accessible option for all. 

This account is the simplest way to earn money by depositing and withdrawing it whenever required. However, it would help if you compared the interest rates of various banks before you decide to open a savings account with them.