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2 mins Read | 5 Years Ago

Advantages and Disadvantages of Savings Account


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Most people when selecting an investment option, only focus on the advantages related to the option. But to make an informed investment decision, it is very important to know the good as well as the bad of the option you select.

While the advantages of savings account are plenty, there are also a few drawbacks too that you should know about before opening a new account. Some of the most important advantages and disadvantages of savings account are discussed below-


1. Earn Interest

A savings account helps you earn interest on the deposited amount. To attract new customers, banks now offer higher interest rates and a host of other benefits such as discounts on locker rentals, unlimited ATM transactions, and more. Moreover, some of the banks also offer many different types of savings account to meet the different needs of the customers.

2. Safest Investment Option

One of the biggest advantages of saving account is unlike most other investment options, a savings bank account does not invest your money but still offers modest returns. All you need to do is to deposit money in your savings account to take advantage of this feature.

3. Minimum Investment Amount

Browse through the different investment options and you’ll see that a savings account is also the most affordable. You are simply required to keep the minimum balance in your account to keep earning interest. This minimum deposit amount can be different for every bank.


1. Interest Rates Can Change

One important disadvantage of a savings bank account is that the interest rates offered by the bank are variable. This means that the bank has the right to make changes to the interest rate. While the changes are generally minimal, it is possible that the interest rate of a savings account now can be lower 6 months down the line.

2. Easy Access

While easy access to funds is seen as one of the most important features of savings account, it can also work as a disadvantage for some people. As these accounts allow you to access your funds anytime you like, people are more tempted to spend. This can make long-term savings challenging.

3. Minimum Balance Requirement

When you open a savings bank account, you’ll be required to maintain a minimum average balance in your account. If you fail to maintain this balance, the bank charges a penalty for the same. So, before opening an account, make sure that you check the minimum balance requirements of the bank and always maintain this balance to avoid the penalty.

Is a Savings Account the Right Option for You?

Now that you know the savings account advantages and disadvantages, you can now easily decide whether or not it is the right investment option for you.

If you plan to go ahead with the savings account, make sure that you check the interest rate offered by the bank and other terms and conditions to enjoy a hassle-free experience.



The contents of this document are meant merely for information purposes. The information contained herein is subject to updation, completion, revision, verification and amendment and the same may change materially. The information provided herein is not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would (by reason of that person‘s nationality, residence or otherwise) be contrary to law or regulation or would subject lClCl Bank or its affiliates to any licensing or registration requirements. This document is not an offer, invitation or solicitation of any kind to buy or sell any security and is not intended to create any rights or obligations. Nothing in this document is intended to constitute legal, tax, securities or investment advice, or opinion regarding the appropriateness of any investment, or a solicitation for any product or service. Please obtain professional legal, tax and other investment advice before making any investment. Any investment decisions that may be made by you shall be at your sole discretion, independent analysis and at your own evaluation of the risks involved. The use of any information set out in this document is entirely at the recipient's own risk. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith by lClCl Bank and from sources deemed reliable. There can be no assurance that such projections will prove to be accurate. lClCl Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. The information set out in this document has been prepared by ICICI Bank based upon projections which have been determined in good faith and sources considered reliable by lClCl Bank. In preparing this document we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us or which was otherwise reviewed by us. Past performance cannot be a guide to future performance. 'lClCl ' and the 'I-man' logo are the trademarks and property of lCICl Bank. Misuse of any intellectual property, or any other content displayed herein is strictly prohibited.

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