Savings Accounts are Bank Accounts where you earn a moderate interest for maintaining a minimum balance. It is a magic box where you store your hard-earned funds that comes in handy during emergencies. The interest rates depend on the minimum balance you maintain in the account. These rates vary between banks. However, there are some limitations on the number of withdrawals you make monthly.
There are numerous reasons to open a Savings Account:
- The interest rates are higher than the
- Through Digital Banking, you can pay bills quickly, make instant transactions, track the account, and more by only adding your login credentials
- Savings Account develops a saving habit. It also brings about financial stability since there are limitations on the withdrawals you make
- You can even access your Saving Bank Account based on your requirements
However, an unused account has its consequences. The moment you do not transact from the account for more than 12 months, it becomes inactive and turns into a Dormant Account.
What are Dormant Accounts?
It is an account that has had no activity for a long time, besides delivering interest. There are no limitations on the withdrawal. So, the owner or the beneficiary can claim the funds anytime. You can avoid turning your Savings Account to Dormant by following these rules:
- Savings Accounts are known to accumulate wealth. It is the first investment for millennials. However, when you change jobs, you change locations. That leads to multiple account ownership. You need to ensure to maintain not only a minimum balance but not turn it into dormant. Remember, keep one Savings and Investment Account accessible through the Banking app.
- If you allow your account to dry up, there are chances that the bank might levy penalty charges. That, in turn, burns a hole in your pocket. Note the additional costs for facilities such as free fund transfer, demand draft, paying bills, and others.
- You may be using these accounts to pay our Loan equated monthly instalments but never for paying bills. Considering India has taken the ‘Digital India’ campaign seriously, certain banks let you pay bills the moment you open a Bank Account. Through them, you can pay other bills and debts too.
- Thanks to Savings Account, you can access other financial products such as Recurring and Fixed Deposits. Some accounts also provide the auto-sweep facility that invests your idle sum from the account into FDs. Note that the sum in your Savings Account should not exceed Rs. 25,000.
