Still not sure why open a savings account? What follows here will help.
Benefits of recurring savings accounts
Get quick and easy access to savings: whether it’s mutual funds, SIPs, NSC bonds, PPF account, premiums, stocks, jewelry, gold bonds or property, there are very few investments that can So, in the event of an unexpected payment, loan payment, or medical emergency, all you have to do is use your debit card or checkbook to withdraw the amount you deposited. Yes, with a savings account to resort to, you can handle all kinds of financial emergencies to get your life back on track.
Keeping your money: you managed to get additional profit, or your expenses did not affect your income this month; what do you do? While putting extra money in a piggy bank is an attractive idea, it is not safe and will not bring you interest in return. Stashing cash under a mattress or at the far end of a drawer is also risky, as a burglary or fire can rob you of your savings. By depositing your hard earned money into a savings account, you are guaranteed that it will be properly insured and safe!
No minimum deposit or large upfront investment: you only have Rs 1,000 to open an online savings account? No problems! This is one of the main benefits of opening a savings account – you need a minimal initial investment. So, if you are just starting to make money but want to develop a spending habit, or you want guaranteed returns but are low on funds for mutual funds or bonds, then an online savings account is definitely the right way to go.
Automate bill payments. Do you have to pay bills that tire you out with strict payment terms and payment deadlines? Your savings account gives you the ability to set up direct debit or automatic payment instructions to automatically pay bills. In addition to saving on late fees, you get the confidence that your bills are paid with your money and not through loans associated with credit cards or other sources.
Disadvantages of a savings account
Low Interest Rates: If you are saving to grow your money quickly, then you are in the wrong place with a savings account. The liquidity and safety of savings accounts require a compromise – relatively low interest rates. However, if you are comfortable with limited returns or low returns, or you are unsure about your investments in mutual funds, government bonds, stocks and other high-yield investment instruments, then go ahead.
Money is not blocked: Your savings bank account can tempt you to invest in your deposits whenever you want. It can be damaging if you end up spending your good money on unnecessary things like premium cars, electronics, vacations, or designer clothes. not needs or emergencies. If you might be tempted to spend in vain, it makes sense to invest your savings in certificates of deposit, stocks, or other long-term maturity-oriented investments.