Why is a Savings Account a Must-Have Financial Tool?

A Savings Account is most people's first official interaction with a bank. Whether you want to apply for a personal loan or a credit card, invest in mutual funds, or purchase an insurance policy, you'll need a savings bank account to complete the transaction. While the basic role of a savings account is to facilitate transactions, it also provides a number of additional advantages.

Advantages of a savings account

1. An overview of real-world finance: A savings account is often an individual's first contact with the financial and banking systems. It's a versatile account. First and foremost, it is a secure location to store your cash. Second, it aids in the organisation of your funds. Savings accounts come in a variety of shapes and sizes. They differ depending on the minimum amount necessary, as well as features such as the frequency of free cash transactions, the availability of a chequebook, and discounts and special offers.

2. Makes money for you: Interest rates on most savings accounts are approximately 3%. This implies that even while you're asleep, your money is working for you. Some savings accounts pay as much as 6% interest if you have a large enough balance in the account. 

3. Debit Cards: Most savings accounts come with a debit card that can be used for both online and offline purchasing. This eliminates the need for you to carry cash with you at all times. Banks often provide discounts on certain brands as well as cashback on debit card transactions, which you won't receive if you pay cash.

4. High liquidity: The money in your savings account is not locked in for a certain amount of time. A savings account allows you to take money out at any time. You may do it at an ATM or at a bank location with a check.

5. Digital services: The usage of a bank account is required by the government's drive for digital payments. Through a savings account, you may use UPI-based applications, mobile banking, and online banking. If you wish to purchase online, these digital services can help you out. Because they are quicker and simpler, the emphasis on digital transactions will only grow in the future.

6. Value-added services: In addition to debit card discounts and rewards, banks also provide services including online banking, chequebooks, and passbooks for savings accounts. Depending on the consumer category, some accounts additionally provide insurance plans.

7. A place to receive payments: A savings account is a terrific way to receive funds from other parties in addition to making payments. The number of checks deposited or issued, as well as the number of payments made to and from a savings account, are unrestricted. This guarantees that having and running a savings account is a painless experience for you.

8. Emergency funds: Keeping your emergency cash in a savings account is a good idea. It instils the value of saving. These accounts act as a safety net in case you need cash for unexpected costs such as medical bills. You'll want your emergency fund to be in an account with instant access so that you don't incur any fees and can access your money whenever you need it.