Opening a savings account is the first step toward gaining access to banking services that allow us to save and earn interest on our money. Savings bank accounts are important in our investment portfolio because they help us keep our money safe, yet they are the least researched financial tool. With the rise of digital payments, it’s more crucial than ever to pick a savings account that offers more features at a reduced cost of operation. Here are some suggestions for selecting the best savings to account for your needs.
Interest rate
Most people opt for a savings account that pays a higher rate of interest than others. Even if you have to pay some account maintenance fees, an account that pays more interest on your savings will effectively raise your overall return.
The Reserve Bank of India (RBI) deregulated the interest rate system in 2011, allowing banks to set interest rates at their discretion. Banks provide a variety of interest rates on their Savings Accounts, ranging from 4% to 6.25 percent per year.
Even if the savings account interest rate looks to be attractive, you should first consider whether you will be able to fulfill the minimum balance requirements as well as any other terms and conditions that may be associated. Without a doubt, you’d like to put your money in a high-interest savings account. But it should come with terms that you can live with.
Minimum balance criteria
Before you open a Savings Account, check to see if it’s a zero-balance account or if there’s a required minimum amount. A fine is frequently issued by the bank if the money deposited in an account falls below the minimum amount. If you’re not sure if you’ll be able to satisfy the minimum balance requirement, a zero-balance account is an option.
Hidden charges
Examine the charge schedule before deciding on a savings account solely on the basis of interest rates. Annual maintenance fees, ATM fees, penalties for non-maintenance of AMB, transaction fees, fund transfer fees, ATM transaction fees for exceeding the free limit, and so on are examples of these fees.
Annual maintenance fees are common in premium savings accounts, and they can reduce the amount of interest generated. Some accounts with minimal or no AMB requirements offer a set number of free ATM transactions.
Ease of online access
Examine the bank’s digital banking services to check if they’re up to standard. In today’s world, banking from home is the preferable alternative. So you should be able to check your account balance, transfer funds, and open accounts such as Fixed Deposits or PPF using your phone or computer.
Debit card offers
Banks provide lots of new freebies when you open a Savings Account. This includes a free checkbook, additional cards, and discounts on groceries, restaurants, and movie tickets if you use your Debit Card, among other things. Examine whether these freebies are appropriate for you. It doesn’t matter if you get these freebies or not if you have minimal need for dining or grocery discounts.
ATM and no.of branches
It’s advisable to choose a bank with a large number of ATMs and branches around the city you’re in. Because you shouldn’t have to drive far to get cash or take care of urgent bank-related business.
Conclusion
Savings accounts are a great method to build wealth while having your money readily at hand. They’re also useful for building an emergency fund so you’re prepared for unanticipated costs. Use the information above to help you narrow down your possibilities if you’re not sure how to choose a savings account.