What Is A Savings Account And Why Is It Important?

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Almost all of us require money to pay several bills and to cover our various expenses. But, people also set aside money for their future needs and to achieve their future goals. For the latter, a savings account is a much better viable option.

A savings account can be defined as one of the basic types of bank accounts that allows us to deposit and withdraw money while earning interest. It is an account that is designed to hold money that one doesn’t require right away. Nowadays, there’s a variant of a savings account, known as a digital savings account. It can be considered a virtual wallet that holds our money. Allowing one to access this money whenever they want.

What Are The Two Common Types Of Savings Account?

1.   Basic Savings Account

Also known as a passbook savings account. In such an account, transactions are updated either in a passbook or a statement issued periodically.

2.   Digital Savings Account

A Digital savings account provides the basis for online banking. This account lets one view, deposit, transfer funds and withdraw money from the ATM. These are accessible from any electronic device.

A savings account is open for all. This means that anyone can approach a bank and have a savings account opened in their name. One can also open an account jointly with another person. The same is applicable for a digital savings account- one can go to the bank’s website and get started with account opening.

How To Deposit And Withdraw Money From A Savings Account?

  • Direct deposit/withdrawals
  • ATM cash deposit/withdrawal
  • Wire transfers from and to other accounts
  • Mobile deposits/withdrawals

What Is The Importance Of Having A Savings Account?

1.   Safe Avenue to park funds

It is a safe place for our funds. Money in a savings account stays there until it is withdrawn, transferred or paid out. It is also an excellent place to store money collected from different sources. Anyone can have more than one line of income. A savings account lets one store all their funds in a single place. Also, banks are trustworthy, which relieves the tension regarding possible theft of cash.

2.   Avail Digital Banking Services

A digital savings account lets one enjoy many banking facilities like internet banking, NEFT, RTGS, UPI, etc. This allows one to operate their account without the need to visit the bank physically.

3.   Income generator

Spare cash in your home is not going to generate any income. However, money kept in a savings account will earn interest income. The interest rate may vary among different banks, but earing interest on your Savings Account is certain.

The Bottom Line

Savings accounts are a safeguard for our funds, while at the same time they help us earn extra income. They also come with lots of user-friendly features that make them easy to understand and highly attractive. So, why keep waiting? If you do not have one yet, go open it. We promise; it will deliver the results you need and provide utmost convenience on time.