Savings accounts can be created as individual accounts or joint accounts. Great way to save money securely. Good start to build good banking habits.
Every bank offers savings accounts, but their characteristics may be different. You have to choose what is the most suitable one for you.
Safety concerns
The bank must be a government-registered and approved financial institution. Money deposited in such a bank is usually very safe. Sometimes, it is even insured up to a certain amount. The aim is to prevent losses caused by the collapse of the banking system.
Interest rate
The bank earns money by investing your deposit money in other financial activities. Bank also gives you a portion of the profit. It is called the interest. Regular savings accounts have a low interest rate. Not a good choice for an investment.
Minimum balance
A bank deposit offers a very high level of liquidity. You can withdraw money whenever you need it. Various payment methods have been introduced by banks.
To be eligible for these services, you must have a balance greater than the minimum balance.
Fees and service charges
The bank charges a fee for the services it provides. This may be an annual/monthly fixed fee or a fee for each transaction. Sometimes it may be both. Sometimes you may have to pay extra for specific services. So, check this before opening an account.
Money management tools
Every bank has introduced different strategies for cash management. Nowadays, these are mostly implemented on digital systems.
- Mobile banking
- Bank statements
- SMS alerts and notifications
But if you have to walk to the bank, it’s very helpful to have a branch near your home.
Debit / Credit card
Most savings accounts are linked to a debit card. However it should have limitations to motivate savings.
If you are doing many transactions daily, my advice is to create a checking account.
Good ATM network
A widespread ATM system brings great convenience. A well maintains network makes everyday life more efficient.
You can withdraw cash from your account using other ATM too, but you have to pay additional service charge.
