Creating a savings accounts is one of the most valuable steps in your personal financial plan. In olden days when inflation rates were low, savings accounts were considered the safest and reliable option to grow your money. Storing money at home or office is associated with more risk of getting stolen apart from remaining idle. It would be helpful if the money is stored or saved at bank.
A good approach for savings accounts would be to start paying yourself first, then you need to save the rest of the money. Now let us see the pros and cons of savings accounts:
Pros:
Easily Accessible in case of emergency: The money which is saved by you can be taken at any time during emergencies. You can withdraw any amount only after leaving the minimum amount to be left in the savings accounts as per the bank.
Safely locked: With a savings account, you never need to worry about your money as it is been stored and locked in safe accounts since it is protected by the bank which guarantees your deposits. High interest savings account is highly secure and the money deposited in such accounts is most subject to earn more interest. Look our for banks offering high interest rates.
Interest on Daily Basis: Earlier interest on savings accounts was calculated on the last day of the month. Recently RBI has made changes in the calculations of interest rates on savings accounts. Instead of calculating at the end of month, banks will calculate interest on a daily basis.
Cons:
Low interest rates: Compared to interest rates of fixed deposits, savings accounts offer lower interest rates. In India, banks offer interest as low as 4%.
Minimum Balance Requirement: A minimum balance has to be kept with the bank, in the saving account by the account holder. We cannot withdraw amount beyond the minimum balance.
