A savings account is a crucial financial tool that allows individuals to store their funds in a safe and secure way while earning interest. The primary objective of this account is to encourage individuals to save money over a certain duration and promote financial stability. Moreover, it allows account holders to earn decent interest on the amount deposited. The interest rate is often a pre-decided rate that can change occasionally. The interest can be paid monthly, quarterly, semi-annually, or annually. One of the most significant benefits of a savings account is that it allows you to withdraw money almost immediately and use it as and when required.

To diversify your portfolio and potentially earn higher returns, consider combining tax-saving schemes with fixed deposits (FDs). FDs offer guaranteed returns, complementing the long-term focus of post office.

A savings account comes with several features that make it suitable for a diverse range of purposes. Here is a list of features to help you understand why this account might just be what you need:

• Simple transactions
  You can use your savings account to send and receive funds through net banking or a debit/ATM card. This enables you to reduce your reliance on cash for transactions, especially for making bill payments.
• ATM facility
  Besides the feature of simplifying online transactions, a savings account also allows you to withdraw cash conveniently via an ATM as and when needed. While most banks have dedicated ATM branches established at multiple locations, you can also access your account from another bank’s ATM when you are unable to find one in your area and require cash urgently.
• Payment of bills
  Nowadays, many banks provide payment facilities such as BillPay with a savings account. With such facilities, you can easily pay utility bills such as water, electricity, and phone recharge directly from your account.
• Net banking and mobile banking
  The majority of banks provide net banking facilities with their savings account. Using these facilities, you can conveniently and seamlessly carry out transactions. For instance, you can send and receive payments simply by logging into your account. You can also download the bank’s app on your phone and use mobile banking to conduct banking activities conveniently from anywhere. Mobile banking apps also enable you to interact with bank executives for any queries without having to physically visit the bank’s nearest branch.
• ATM/debit card
  Banks provide an ATM/debit card to savings account holders. You can use this card to access your account through an ATM, as well as to make payments at a merchant store or through an online payment gateway.
• Savings interest rates
  Banks offer attractive interest rates on savings accounts, enabling account holders to store their idle money and grow it over time.

Also read: Zero balance saving account

To cater to diverse customer needs, banks offer various types of savings accounts. Some common types include:

• Regular Savings Account: This is the most basic type, offering essential features like check-writing, debit cards, and online banking.
• High-Yield Savings Account: These accounts typically offer higher interest rates than regular savings accounts but may require a higher minimum balance.
• Money Market Account: This hybrid account combines features of savings and checking accounts, offering higher interest rates than regular savings accounts and check-writing privileges.
• Certificate of Deposit (CD): While not technically a savings account, CDs offer a higher interest rate than traditional savings accounts in exchange for a fixed deposit term.

Savings accounts offer various benefits to cater to the diverse needs of its customers. Some of these benefits are as follows:

1. Interest earnings: Depositing your funds in a savings account can help you earn interest on your balance. Banks across India offer competitive interest rates, allowing your savings to grow steadily over time.
2. Safety and security: A savings account can provide a secure place to store your money, especially if your bank employs robust security measures to safeguard your funds.
3. Liquidity and access to funds: With a savings account, your funds remain easily accessible whenever you need them. Banks provide a vast network of ATMs and mobile banking services, ensuring hassle-free and convenient access to your funds with a range of debit cards.
4. Additional banking benefits: Different banks providing a savings account may offer various additional benefits, such as exclusive offers, special discounts, and preferential loan rates. You can access a comprehensive banking experience by maintaining all your accounts with a single bank.

A savings account is a fundamental financial tool that offers numerous benefits. From security and accessibility to interest earnings and financial goal achievement, it plays a vital role in building a strong financial foundation. By understanding the different types of savings accounts and choosing the one that best suits your needs, you can make the most of this valuable financial resource.

If you are looking to diversify your investments portfolio, Fixed Deposit (FD) can be a good choice. FDs provide a fixed interest rate throughout the investment period. Interest rate on FDs does not change with market fluctuations. NBFC’s like Bajaj Finance offers one of the highest rate of up to 8.60% p.a. on their Fixed Deposits.