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Tanya Saksena

Senior Copywriter, LXME

Reasons-why-having-a-savings-account-is-important-for-you

Imagine this: you are going about your life and suddenly you are struck with the news that a deadly disease, unknown to anyone in the world, has been on the spread. The only way to control it is for the entire world to go into a lockdown. Bizarre, right? But this isn’t fiction anymore, it’s a part of our history.

During this time, most of us realized the importance of a savings account and having an emergency fund: To survive and afford necessities.

The importance of savings account cannot be overstated, especially for women. A savings account serves as a cornerstone for financial stability and empowerment.

Let’s explore why having this financial safety net is crucial i.e. savings account benefits:

Financial Security and Independence with an Emergency Fund

For women, possessing an emergency fund is akin to having a financial safety net. It provides a sense of security and independence, allowing them to navigate through unexpected challenges without hampering their financial well-being.

Mitigating Life’s Uncertainties

Life is unpredictable, and emergencies can arise at any moment, as we have already seen in the past. Whether it’s a sudden medical expense, home repair, or unforeseen circumstances like job loss, or a worldwide lockdown, having an emergency fund ensures that women are well-prepared to handle such situations with financial resilience.

Peace of Mind

Knowing that you have savings set aside can reduce financial stress and provide a sense of security. It allows you to navigate unexpected expenses and life events with greater confidence. It also allows you to focus on your personal and professional growth without worrying about unforeseen expenses.

Easy Access to Funds

Another one of the savings account benefits: it offers liquidity. You can easily withdraw money when needed. Unlike some other investment options, there are typically no penalties for withdrawing funds from a savings account.

Budgeting Tool

The importance of savings account never end. They can serve as a tool for budgeting. By allocating a portion of your income to your savings regularly, you can better manage your spending and ensure that you’re consistently saving for the future.

Short-Term Goals

If you have specific short-term financial goals, such as a vacation, or purchasing a new mobile, a savings account is one of the ideal places to set aside money. It helps you stay disciplined in saving for specific objectives.

Types of Savings Accounts:

Let’s explore the various types of savings accounts and savings account benefits, each catering to different financial needs and goals.

Traditional or Regular Savings Account

When you think of an account to save money, a traditional or a regular savings account pops up immediately. These are the savings accounts you typically find at traditional banks.

These savings accounts allow you to earn interest on your money, but they are lower than other investing options. It’s usually easy to open a regular savings account at a branch, or online with a low minimum deposit. They normally allow you to make three to five monthly withdrawals before incurring a small additional fee.

Salary-Based Savings Account/ Salaried Accounts

Tailored for salaried employees, these Saving Accounts feature all the regular advantages of any other basic Savings Account. Apart from this, they also offer the benefit of a zero minimum balance requirement, overdraft facilities, higher transaction limits, and exclusive offers.

Savings Accounts for Women

Several banks offer savings accounts specifically designed for women. These accounts may come with benefits like cashback on shopping, discounts on healthcare services & lockers, preferential rates on loans, and customized financial planning assistance. They also provide skill-building programs and courses that enable women to be self-sufficient.

3-in-1 Accounts

This is the perfect account for investors looking to trade in the markets. It offers the benefits of 3 accounts in 1. You can open a Trading Account, a Demat Account, and a Regular Account with this. Sounds like a great deal tbh!

Understanding the savings account interest rates is vital for optimizing the growth of an emergency fund. Different types of savings accounts offer varying interest rates. Therefore it’s essential to compare interest rates offered by different banks. Some accounts may provide higher interest rates but could come with certain conditions or restrictions.

The best savings account involves considering your financial goals, transaction needs, and associated benefits. Online research, customer reviews, and consultations with financial advisors can help identify the most suitable and top savings account options for you.

Share this with someone who is yet to open one and let them know the importance of saving account. After all, it’s a foundation for a secure future.

You can also learn how to save according to your personality type

FAQs

What is the advantage of saving account?

Savings accounts have many advantages, some of them include:
– Financial security with an emergency fund
– Peace of mind during an emergency
– Easy access to funds
– Budgeting tool
– Achieving short-term goals

Which type of savings is best?

Different types of savings accounts offer varying interest rates. The best savings account involves considering your financial goals, transaction needs, and associated benefits. Online research, customer reviews, and consultations with financial advisors can help identify the most suitable and top savings account options for you.

Are savings accounts a safe option?

Savings accounts are one the safest options to save your money as your money is deposited and not invested anywhere. The banks pay interest on the deposited money in your account.

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