A Savings Account provides a safe way to grow your money over time while having easy access to it when you need it. However, several myths discourage people from opening them. Here are facts which will resolve all your questions about Savings Accounts:
- You can open high-yield Savings Accounts
You may get discouraged from investing your money in the account because their potential returns have been meagre recently, but things have changed. Some Savings Accounts offer annual percentage yields of over 4%, making them a great investment option. APYs are affected by rates set by the RBI. When they increase it, you may see APYs increase.
- Start saving early on
Time is on your side, so the earlier you start saving, the more money you can build through compound interest. If you keep adding to your original deposit and increase the amount of money earning interest, your savings grow faster. As a result, saving while you are young could help you reach your financial goals sooner.
- You need not earn high income
It is challenging to save on a tight budget, but even minor contributions can add up over time. Set any change you receive during the week aside. Every week, deposit the change into your Savings Account, regardless of whether it is a few rupees or a chunk of your savings. You will build your Savings Account and, more importantly, develop healthy financial habits.
- It makes you financially secure
A strong Savings Account helps people feel better about their financial prospects. People with liquid savings feel more secure than those who lack them. The more you save, the stronger your feelings of financial well-being will be. When you know you have enough savings to pay for unexpected expenses, your confidence increases. Moreover, the Savings Account interest rate earnings add up to your overall account balance, making it worthwhile.
- Banks are a safe place to store funds
Many depositors were concerned after the merger of some regional banks, so they may hesitate to put their money. Banks are safe places to keep your money. Just be sure your bank is insured by the DICGC. They offer Insurance on bank deposits up to Rs. 5 lakh per depositor in India.
- You can easily access funds
With few exceptions, one of the main perks of a Savings Account is the ease with which you can access your money. They keep your funds liquid, which means you can access your money anytime. Even as your money compounds in the Savings Account, you can withdraw from it as needed.
Many banks may limit Savings Account withdrawals or transfers to four per month. Check with your bank to make sure you do not violate their rules.
