When it comes to money, being cautious means saving it for occasions when you might need it the most. It could mean getting repairs done in your home or covering sudden medical expenses. With these goals in mind, you always try to save more money than you did last year.
Regardless of how you save and how much you save, it is crucial to decide where you are going to put this money. Many often think about putting it into investment options. But that is a risky option if you simply wish to have more money on your hands. In such a situation, your best option is to have a savings bank account. Here are few reasons that make savings account the best option to store your money:
Safe option to store money
Savings accounts give you a great deal of safety when it comes to storing your money. The biggest sign of safety is that you can deposit or withdraw money from your savings account with ease. This way, you do not have to find a place to store cash. Moreover, you don’t have to carry cash with you all the time.
Digital banking services
The government has been making a lot of efforts to promote digital payment options. With newer payment options and more opportunities to make digital payments, these efforts made by the government only need to be complemented by people willing to adopt a new way of making transactions. For people with a savings account, making the transition to digital payments is much easier. This is because online savings accounts offer digital banking facilities like net banking, NEFT, RTGS, IMPS, UPI, etc. This way, you do not need to go to your bank branch to make any transactions.
Government scheme benefits
The government has taken a lot of initiatives to improve personal finance practices in the country. One of those efforts is to promote savings accounts for everybody. To do so, they have paired a lot of their schemes to saving accounts. For example, the benefits and subsidies that you may receive from various government schemes will be deposited into your savings account. In such a case, not having a savings account could cause trouble in receiving those benefits. Moreover, having a savings account also helps you in getting these benefits directly. There are no middlemen to be concerned about and much less processing.
Income through interest
The main reason you save money is to spend it on something later. But until that time comes, leaving it lying around does not do you any good either. Hence, you need to make sure that your money works for you. You can use your savings account for this as well.
When you take a loan, you pay a certain percentage of the principal amount borrowed as interest. It serves as the fees for taking the loan in some way. This mechanism is reversed in the case of a savings account. When you open a savings account, you give your money to the bank for safekeeping. Hence, the bank pays you interest for holding that money. This means that you earn more money by simply putting your money into a savings account. Moreover, the interest you get paid is decided by the interest rate. This means that the more money you put into the savings account, the more interest you earn.