Ideally, every person should have a savings account after turning 18 years of age. But the problem is that many people need to be made aware that making this account is helpful or must meet a certain eligibility criterion. Therefore, the blatant lack of knowledge and awareness leads to several later consequences, which is why this article will shed light on some of the facts about a savings account.
Here, we will discuss savings account meaning, benefits, eligibility, and fundamental aspects. As a result, you will gain the much-needed clarification and decide whether you want to open the account.
What is a savings account?
The first and foremost thing to learn is about savings account meaning. Only then will you be able to understand the details explained further. So, a savings account is a bank account where you can deposit any amount, from INR 500 to no upper limit, at any time. You have no time limit to make the deposit every month or on a certain date.
In return, you will get a certain interest on the total outstanding balance of your savings account. The interest rate varies from one bank to another, so studying more about the applicable rates before opening the account is feasible.
Also, you can issue a check, a credit card, and a debit card against the savings account. The check will help you withdraw or deposit money into someone’s account. On the contrary, a debit card is for withdrawing money, and a credit card is a type of loan card.
What are the types of savings accounts?
These are the following savings account type you can open in the bank:
- Single-holder savings account: From the name itself, you can understand that the account will have one holder with or without a nominee.
- Multiple holders savings account: Here, two different account holders can open a savings account together. One will be the primary account holder, and another will be the secondary holder.
- Salary account: This type of savings account is usually opened when you get employment, and the employer credits the salary to this.
- Minor savings account: You can open this type of account for anyone under 18.
- Zero-balance savings account: Ideally, a savings account states you need to give a certain deposit to open it, like INR 500 or INR 1000. But a zero-balance savings account means you can open it without any prior deposit.
What are the benefits of a savings account?
- The first and foremost benefit of having a savings account is that you can withdraw your money anytime, without any restriction.
- Also, there is no restriction in depositing the money or the time of deposit. You can either make a monthly routine of depositing a certain fixed amount or make the transactions according to your convenience.
- As the name suggests, this particular bank account will help you save funds that can be used later for any emergency or according to your financial requirements.
- It is important to have a savings account if you want to open a recurring or fixed deposit account or take a home loan or vehicle loan.
When to open a savings account?
To open a savings account, you must submit a couple of documents as your identity and address proof. Apart from this, a photo of yours will also be needed. If you are opening a regular account, you need to make the minimum deposit, or else you can go for the zero balance savings account.
With this explanation, you now understand what a savings account means and how it can help you. Based on this, you can decide if you want to open the account now or sometime in the future.