Campbell McConnell, an economist has rightly said, “Savings, remember, is the prerequisite of investment.” If you wish to see your money grow it is important for you to save money instead of spending it on the materialistic things. Saved money which can be deposited in a savings account will definitely help during a financial crisis. Savings account is considered as the safest place because money deposited in the bank is safe and helps earn a higher rate of interest on Savings account. There are around hundreds of financial institutions available in India who offer savings account facilities with a plethora of benefits which can confuse a depositor in selecting the account. Here we have listed down 5 points which will help you select the right savings account with which you can see your money grow.
- Set a goal:
Determine the goal for which you are saving money, either you are saving money to buy a home or buy a car. Your goals will help you decide in which bank you should open the account because that way you can determine how much amount you will be able to save with interest income. If you have more than one goal then you should consider saving money in different accounts and if you are saving money as emergency funds then you can save money in one account and which offers the highest interest rate.
- Go with a bank who allows you to keep minimum balance:
It is advised to deposit money in an account which allows you to keep minimum or zero balance because if an account holder does not maintain a minimum balance then he/she may have to pay minimum balance requirement fees. The fees can range between Rs 150-Rs 500. There are banks who have the facility to open a zero balance account, meaning a depositor does not have to maintain a minimum balance on quarterly or yearly basis. Standard Chartered, HDFC Bank, State Bank of India, Axis Bank, ICICI Bank and many others open zero balance savings accounts with different names. On the other side Allahabad Bank, Bank of Baroda, Bank of Maharashtra, and Central Bank of India you can keep as low as Rs 1000.
- Net banking facility:
We all are currently living in an era of digitalisation where most of the things take place with the help of technology and arrival of netbanking facility has given a boost to the financial sector. At the comfort of your home and office you can easily do most of the financial activities. Open an account in a bank who offers the facility of netbanking because now some banks charge fees for a particular service if you visit the bank and it is done for free if it is done online. For example HDFC Bank charges Rs 50 if you wish to stop the cheque payment while it is done for free online. Also, all the banking facilities are available 24*7 and 365 days, all you need is active internet connection.
- Read the fine print carefully:
It is very important to read the document of terms and conditions very carefully before choosing a bank to deposit the money in a savings account. There are financial institutions who may charge extra money for particular services like generating PIN or issuing a passbook. For example ICICI Bank and Axis Bank levies Rs 100 from a customer to issue a duplicate passbook, whereas HDFC charges Rs 50 to issue an additional cheque book.
- Do not deposit a large sum of money in one account:
To keep earning interest and money safe it is a good idea not deposit more than Rs 1 lakh-Rs 5 lakh in one bank account. The reason behind this advice is that as per the Deposit Insurance and Credit Guarantee Corporation, DICGC rules, insurance for up to Rs 5 lakh is provided to a depositor.
Either you have to open a savings account for the first time or you are not happy with the customer service of the current bank, these tips will help you select the best savings account which will also help you fulfill your short term and long term goals.