Do The Advantages Of Savings Account Outweigh Its Disadvantages
Be it opening a new bank Fixed Deposit (FD) or selecting one of the other top investment options; it is necessary to know the benefits as well as the drawbacks to make the right decision. The same is true for Savings Account as well. Read this post to know some of the most important advantages and find out if it outweighs the disadvantages of Savings Account.
Most people when selecting an investment option, only focus on the advantages related to it. However, to make an informed investment decision, it is imperative 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 that you should know about before opening a new account. Some of the most important advantages and disadvantages of Savings Account are stated 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 diverse needs of the customers.
2. Safest Investment Option
One of the biggest advantages of Savings Account is that unlike most other investment options, a Savings 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
You are simply required to keep the minimum balance in your Savings Account to keep earning interest. This minimum deposit amount can be different for every bank.
4. Easy Access to Your Funds
A Savings Account is probably the only option that keeps your money invested while also allowing you to use the funds as and when you like. You can deposit funds and withdraw the same without worrying about any penalty or lock-in period which is common with most other types of investment. You can also transfer money from your Savings Account to any other bank account online with the help of your bank's Internet Banking facility.
5. Debit Card with Exciting Features
Savings Account comes with a Debit Card to make it easier for the bank customers to withdraw money from ATMs. You can also swipe your Debit Card at offline stores and showrooms to enjoy cashless shopping. However, apart from this convenience, some of the banks also offer a host of exciting benefits with the Debit Cards. From online shopping vouchers, premium subscription to food delivery service, online Over-The-Top (OTT) media services platforms, to cab hailing service, the benefits make using Debit Card more fun and rewarding.
- Interest Rates Can Change: Banks have the right to make changes to the Savings Account interest rate. However, such changes are generally minimal.
- Easy Access: Easy access to funds is both an advantage and a drawback. While this ensures that you can use your funds when required, it also tempts people to spend more.
- Minimum Balance Requirement: If you fail to maintain the minimum balance required by the bank, the banks can charge a penalty for the same.
Is a Savings Account the Right Option for You?
While there are a few drawbacks too, the advantages of Savings Account definitely outweigh the disadvantages. Moreover, most of the disadvantages can be tackled by applying a few tactics such as opening FD account alongside or opting for a zero balance account.
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