Savings Account: What is It?

piggy bankBanks and other financial institutions serve a very important need of the common people. In modern times, it is impractical and risky to keep cash in your home. You also cannot carry the cash in your wallet all the time to safeguard it. Whether you are employed in a service or operating a business, you need to have an account in your name in a bank.

Saving accounts are the simplest and most basic of accounts that are allowed by banks to be opened, maintained, and operated by individuals. You can keep your money in your saving account and forget about its safety. This is because banks provide ultimate safety and security to your money as it remains parked in your bank account.

There are many features with a savings account that you can enjoy as a holder of this account. You can not only withdraw money from the account whenever you need it but also deposit any surplus money you have with you. What is great is that your money is not only safe and secure; it also earns interest provided by the bank. Interest is applied by the bank on a quarterly basis on the balance amount in your account.

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Savings account interest rates keep on fluctuating according to the policies of the national bank of a country. Different banks provide different rates of interest on savings account. You must compare the rates of interest offered by different banks on their saving accounts and find the bank with the best savings account rates.

The money you keep in your saving account is like money for a rainy day as you can withdraw it and use to meet any exigency that arises in your life. This is the reason why financial experts suggest making it a habit to keep saving some part of your earnings.

The money in a savings account is not as liquid as a checking account and there are restrictions on the number of times you can withdraw money from your account. Nevertheless, such an account is very good in inculcating the habit of savings and gives protection to your money in addition to giving the benefit of interest on it. There are many benefits of keeping a savings account in your name.

  • You are able to save money out of your earnings
  • Your saved money earns interest provided by the ban
  • You can withdraw your money any time
  • You can make payments by issuing checks to vendors
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The main aim behind allowing the facility of savings accounts is to encourage people to save money. This is the reason banks give interest on money parked in these savings accounts to lure people into opening these accounts. No loans are provided by banks against money in a saving account but you are free to pay the installments of your home loans and other items that you get financed by the bank.

 

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