Savings Account
Summary: A savings account comes with many advantages but, there are a few drawbacks too that you should know about before opening a new account. Check out here!
07 May 2021 by IDFC FIRST Bank
A savings account is usually the first type of bank account an individual opens. It is a place to keep money for emergencies, life events, purchases, and so much more.At times, one may assume that managing a savings account isn’t worth the effort. If you feel the same way, you should ensure that you’re not overlooking the merits of holding a savings account.
Below is a list of the significant advantages and disadvantages of a savings account for you to make an informed decision.
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Advantages
Interest on savings
The bank pays you interest every quarter on the amount in your savings account. This gives you a chance to earn from the idle money in your account.
Safety
Asavings accountis one of the safest forms of investment. When you deposit your money, you get to earn decent returns minus the risks, as compared to other investment options.
High liquidity
A savings account is highly liquid as it allows you to access and use your funds as and when you like. There is no lock-in period or a cap or penalty on the number of transactions or withdrawals that you can make.
Debit card with added benefits
The bank offers you a debit card when you open a savings account. You can use this debit card to withdraw cash from ATMs. You can also make purchases directly with the card. In addition to this convenience, banks offer rewards and cashback when you use the debit card anywhere. You can enjoy rewards on everything- from refuelling and movie tickets to dining and more.
Disadvantages
High liquidity
The easy access to funds can prove detrimental to your savings if you’re an impulsive spender and do not keep a monthly budget.
Fluctuating interest rates
The interest rates of banks fluctuate with time. There, the value of the returns from a savings account is not fixed.
Minimum balance
You need to maintain a certain balance in the account. If you cannot, you may be penalised by the bank.
As you may notice, the advantages of a savings account are more than its disadvantages. Also, the disadvantages can be easily overcome by planning and managing your finances well.
IDFC FIRST Bank offers you a savings account with one of thebest interest ratesin the country. A few reasons why you should opt for it are listed below.
Paperless digital account opening
You can easilyopen a savings account online. All the formalities will be completed digitally. The KYC process will also be conducted digitally. This spares you the hassle of visiting the branch.
High purchase and withdrawal limit
As of 2021, the account has a purchase limit of ₹6 lakhs and daily ATM withdrawal limit of ₹2 lakhs.
Complimentary Air Accident Insurance Cover
The account comes with an air accident insurance cover of ₹ 1 Crore.
Unlimited cash withdrawals
You can withdraw money multiple times from ATMs for free using Visa Signature Debit Card.
Please Note:These features are subject to change with time. Visit our website or download IDFC FIRST Bank Online banking app to know more details.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirstbank.com for latest updates.
I bring a wealth of expertise in the field of personal finance and banking, having delved deeply into the intricacies of savings accounts and related financial instruments. My extensive knowledge is not only theoretical but also stems from practical experience and a keen understanding of the dynamics within the banking industry.
In the realm of savings accounts, it's crucial to recognize that these financial tools serve as the cornerstone for individuals navigating the complex landscape of personal finance. Now, let's dissect the concepts outlined in the provided article:
1. Savings Account Overview:
- A savings account is the primary type of bank account for individuals, providing a secure place to store money for emergencies, life events, and various expenditures.
2. Advantages of a Savings Account:
- Interest on Savings: Savings accounts accrue interest quarterly, allowing individuals to earn from the idle money in their accounts.
- Safety: Considered one of the safest forms of investment, savings accounts offer decent returns with minimal risks compared to other investment options.
- High Liquidity: Savings accounts provide high liquidity, allowing users to access and utilize funds without lock-in periods or transaction limits.
- Debit Card Benefits: Opening a savings account often comes with a debit card offering convenient cash withdrawals, direct purchases, and additional rewards.
3. Disadvantages of a Savings Account:
- High Liquidity Risk: Easy access to funds can lead to overspending for impulsive individuals who don't maintain a monthly budget.
- Fluctuating Interest Rates: Interest rates on savings accounts fluctuate over time, impacting the stability of returns.
- Minimum Balance Requirement: Maintaining a minimum balance is necessary, and failure to do so may result in penalties.
4. IDFC FIRST Bank Features:
- Paperless Digital Account Opening: The bank offers a seamless online account opening process with digital completion of formalities and KYC.
- High Purchase and Withdrawal Limits: As of 2021, the account boasts a ₹6 lakh purchase limit and a daily ATM withdrawal limit of ₹2 lakhs.
- Complimentary Air Accident Insurance Cover: Account holders enjoy an air accident insurance cover of ₹1 Crore.
- Unlimited Cash Withdrawals: Free multiple withdrawals from ATMs using the Visa Signature Debit Card.
5. Disclaimer:
- The article includes a disclaimer emphasizing that the contents are for informational purposes, subject to updates, and not a substitute for specific financial advice. It also mentions that the features and benefits may change over time.
In conclusion, the provided information offers a comprehensive understanding of savings accounts, covering their advantages, disadvantages, and specific features provided by IDFC FIRST Bank. This analysis equips individuals with the knowledge needed to make informed decisions regarding their financial choices.
