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Finance

How to Determine Which Savings Account Is Right for Me?

A savings account is a basic type of bank account that allows you to deposit money and manage finances in a much better way. Whether you wish to pay utility bills, transfer, withdraw or receive money, shop, or invest, you can use savings accounts. Therefore, everyone must open a savings account irrespective of his or her economic or financial status. Moreover, the balance in your savings account can also earn you interest at the rate of 3.5%-4% per annum. By opening a savings account, you will be able to manage money efficiently and keep a track of the expenditures.

Nowadays, there are various types of savings accounts such as regular savings account, zero balance savings account, linked savings account, fixed-rate savings account, senior citizen savings account, etc. All of these come with distinct features to cater to your needs. Check out some important tips below, that can help you determine which savings account is right for you.

How to Find the Right Savings Account?

You must make a note of the following aspects before opening a savings account:

  1. Know the purpose of saving

Set a saving goal for yourself before opening a savings account. If you are clear about how much money you want to save, and by when would you need the money, you will be in a better position to choose the right savings account for yourself. In addition, if you have more than one goal, you can use different accounts for each one of your goals. For instance, you can open an instant access savings account to save for an emergency fund, and a fixed-rate savings account to save up for long-term goals such as purchasing a house.

  1. Compare the rates

Savings accounts earn interest. Therefore, before you open a savings account with a bank, you must take a close look at the interest rate offered. By opting for a high-yield savings account, you can grow your money faster.

  1. Check if there are any fees

Before you open a savings account, you must check if the bank has levied any monthly maintenance charges on the account. Since there are numerous options for no-fee savings accounts, you must avoid opting for an account wherein you are required to pay a monthly maintenance or service fee.

  1. Minimum deposit and balance

You may need to maintain a certain balance in the savings account to avoid penalty charges, or to start the account. However, if you wish to open the account with less money, find an account with a low minimum deposit, or none at all. Many banks offer savings accounts with no minimum balance required.

In India, you can easily open a savings account online from the comfort of your home with reputed banks.

The right savings account for you might not be the same as the one recommended by a friend or a colleague. Make sure you are aware of all the above-mentioned details for a savings account you decide to go with. In this way, you will be able to choose one that best suits your needs.

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