A savings account is a standard bank account that lets you save money in a secure location and withdraw funds while earning interests. These accounts are provided by banks, commercial banks, credit unions, etc. The savings account is insured by FDIC, and interest on them depends on the providers.
What Are The Types of Savings Accounts?
Before youopen savings account you should know what are the types of it. Following are the type of savings accounts –
- Regular Savings Account
It is the most basic form of savings account. You have to maintain a certain balance in your account. This is ideal for your basic banking needs.
- Zero Balance Account
This is similar to the regular account, but you do not have to maintain the minimum balance on this account. It also comes with a debit card/ATM facility for easy transactions.
- Kids’ Savings Account
This savings account is designed for parents who want to save money for their kids. Additionally, parents can also facilitate their children with debit cards. It could be a great way to instill money management skills in kids.
- Women’s Savings Account
This savings account is tailored to cater to the requirements of women. There is a requirement of minimum balance. However, the account holders get to leverage benefits on their transactions.
Why Should You Open a Savings Account?
There are many benefits of opening a premium savings account –
- Optimum Safety
Savings account stores your money in a secure place – a bank or credit union. Cash that remains in your hand is always at the risk of being stolen or damaged. However, you can eliminate the risk of losing your hard-earned money by saving it with banks.
FDIC insurance protects the banks, whereas NCUSIF insurance covers the credit unions. Moreover, the savings account opened with credit units are also reckoned as share accounts.
These accounts also provide easy access to your money. You can withdraw the cash or transfer the funds through cheque, electronic funds transfer, or debit cards.
- Leverage Value-Added Services
Banks often come with value-added services as well as benefits for saving accounts. Some banks provide discounts on making purchases with merchants, rewards points, or cash back on debit cards.
Additionally, banks also offer accident or medical insurance at basic levels. Moreover, the Deposit Insurance and Credit Guarantee Corporation or DICGC ensure the savings account up to Rs. 1 lakhs.
- Income Growth
Savings accounts offer interest on the money you have deposited into the account. Consequently, your bank will continue to add a small sum of money into the account, often every month.
The interest rate is based on the bank’s policies and economic conditions. While the interest rate is not very high to match inflation, there is no risk of loss as your funds are insured. A little interest is better than getting no interest.
Opening a savings account is one of the safest ways to secure your money while earning a little interest on the same. Above, we have shared some information about a savings account that will help you better understand the concept.
