For most people, their first experience or encounter with a bank is through a savings account as it is an important step towards becoming an independent individual. It isn’t necessary that you have to be a working and earning person to have a savings account to your name. Students, housewives and retired people too keep a savings account because stacking up savings guarantees a secure future for all. The sign of an organised and prudent individual is one who realises the value of money and doesn’t recklessly spend it. Having a savings account just helps you with the process.
There are many ways to save money but why is emphasis always laid on keeping a savings account? Let us find out the primary reasons why it is absolutely necessary to have a savings account.
Safe place to stack up funds and build wealth
A savings account with a trusted bank is the safest place where you can park your money. Depositing the surplus amount in your savings account prevents you from carrying significant sums of money with you and thus removes the possibility of theft. Although the possibility is remote, it still doesn’t hurt to take measures to prevent it. Carrying a lot of money on you means you have to be on guard all the time. If you happen to be spendthrift, then you can save the money from being spent on your reckless whims.
Saving money also means that after a certain period of time, you will have made quite a fund in your savings account, which will act as financial security to you.
Transfer money easily
One of the many reasons why people keep a functional savings account is to send or receive money through simple bank transfers easily. You don’t have to be physically present anywhere to give money or receive money in cheque or cash when you can just send the money over with using just a few details.
Avail digital banking
This is the age of the internet and the financial scenario has caught up with it as well. There have been a lot of talks from the government to digitalise payments and money exchange. Thus, to that end there are various new facilities by which you can operate your bank account through the internet or through applications. Net banking, UPI, IMPS, RTGS are few of those facilities. You can utilise these even from your smartphone and easily handle funds with just a few clicks. The best part about digital banking is that you can even open savings account online without being physically present in the bank. It is literally a boon for the busy lives of today’s working people.
Meet unprecedented expenses
You never know when an unexpected expense might come knocking at your door. It could be sickness, an accident or just an expensive wedding gift for a close friend, all of which need immediate money. You can turn to your savings account for the money and access it easily without any hassle. Moreover using the credit card too much with piling credit card debt affects your credit score in a negative manner. If you regularly deposit funds into your savings account, then you can have a substantial amount saved up which can be spent after emergencies and unexpected expenses. No one is asking you to not use the credit card loan at all, but it is best to be wise about it.
A good way of growing funds in the savings account is through interest income. The banks use your money to meet their financial expenses like lending out loans and in exchange, they pay you a fee, this fee is called the interest. If you keep money at home, it is not going to magically grow into more money thus it is of course more beneficial to have it in a savings account where you can earn extra money from interest.
Avail government schemes
There are many government-sanctioned schemes and subsidy programmes which you can avail if you have a savings account. The funds will be directly transferred to your account without employing any representative middleman in between. It is a convenient process both for the beneficiary and for the paying party.
This might sound like an unnecessary luxury but in the present pandemic ravaged world where total lockdowns are a common thing, every activity is shifting online. Shopping too is. Even general grocery shopping can be done online and if you have a savings account, you can pay easily either by your card or by UPI apps.
In today’s world where finance is key to a comfortable life, it is extremely convenient and easy to have a savings account. After all, having a fund to fall back on acts as great security in life. And when you can open savings account online, everything becomes a simple task.