The first account when you start banking is a savings bank account. It is a basic account where you can put your extra cash and the bank pays an interest on the amount. Instead of lying idle in your purse, the extra cash helps you earn a little interest when deposited in the savings account. There are other types of accounts like the current account, salary account and the money market account which you can operate in a bank. Let us learn about the basic savings account in this article.
Opening a savings account in a bank is easy. You just have to fill up the application form and submit your id and address proofs. The process is done. You can also open savings accounts in banks by filling up online application forms. Once the account is opened, you can deposit and withdraw money from your account either by going to the bank or online through net banking and mobile banking. The savings account can also be linked to your other accounts which make the transfer of funds from one account to other easier. You can also pay your utility bills, insurance and other payments directly from your savings accounts. You get a debit card when you open a savings account with a bank which can be used to make online payments for your shopping and also can be used at various outlets in place of cash.
Before opening an account the customers should learn about the basic savings account and its advantages. The interest you accrue on money in savings account is less than that you earn on fixed deposits and other high interest products, but it provides the flexibility of depositing and withdrawing funds according to your convenience. While opening a savings bank account, search for banks offering high interest rates on savings accounts. Online banks offer comparatively higher interest rates due to low operating costs. Some banks also provide attractive offers to women customers and offer them a bit high interest rates on savings accounts.
Saving money in the accounts is safe and it protects you from theft. The money in savings deposits is insured by the bank hence the depositors need not worry about losing their money if the bank defaults. The bank provides you with account statements monthly or quarterly so you can have a tab on all your transactions with the bank. Having a savings bank account inculcates responsible spending. You cannot use a debit card as irresponsibly as you use the credit cards because the spending on debit cards is limited to the balance you have in your account.
Some banks charge a small fee for opening a savings account and also charge transaction charges for every withdrawal or transfer. Some bank also have requirement of maintaining a minimum fund balance in your savings account and levy fines when your balance goes below the minimum requirement. To avoid losing your money in the form of fees and fines always read the terms and conditions of the bank clearly before you select a bank to open your account.
Having a savings account is a great way to earn a little extra income on your idle money. It also helps you to develop responsible spending habits and eliminates the risk of theft. The amount in deposits is safe and you can use it to pay your utility and other bills. Opening an account in a bank is easy and can be done online too. Always read the terms and conditions regarding minimum balances and other fees and charges before finalizing a bank to start your account.