A Savings Account is one of the most versatile ways to safely store your money in a bank and build an egg nest for the future. It allows you to withdraw funds and perform online transactions while earning interest on your deposit in the process. However, with so many different variations out there, it can be a bit overwhelming to decide which type of Savings Account to choose. With that in mind, let us take a look at the 7 things you must consider before opening a Savings Account.
1. Assess Your lifestyle and financial goals
In a financial marketplace that is becoming increasingly competitive, several banks now offer different types of Savings Accounts, catering to specific demographics and interests. For example, there are Savings Accounts optimized for working professionals, women, children, senior citizens, young adults between the age of 18-25 or students and several other groups.
Moreover, some of these accounts may be accompanied by international debit cards, while others may come with special cash back offers on shopping, loan facilities, locker facilities and insurance benefits.
2. Shop around for attractive interest rates
It may be convenient for you to open a Savings Account with a bank that is close to your home. However, by doing so, you may miss out on earning more interest. In India, major lenders generally offer an interest rate of 4%. At the same time, there are some banks that offer higher interest.
This results in more value for your savings. So, next time you are looking to open a Savings Account for yourself or a loved one, be sure to look around and see what’s best out there.
3. Look for minimum opening deposit/minimum balance
There are many banks which require you to deposit a minimum amount before you can open a Savings Account with them. Similarly, you will also come across lenders that will ask you to maintain a minimum balance in your account throughout your time with them.
Of course, there are banks with nil minimum balance in your Savings Account. Some people prefer this option as it gives them more flexibility to use their funds while others like the idea of having a minimum balance as it makes them more disciplined and judicious with their money. It all comes down to personal preference at the end of the day.
4. The ease with which you can avail credit
Several banks offer attractive rates of interest to customers who already have an existing relationship with them. If you ever plan on taking a loan in the future, it is always better to establish a relationship with a lender who is known to offer excellent rates to their customers. Build a rapport with them over time and when the time comes to ask for a loan, you may very well benefit with low rates of interest.
5. Understand the schedule of charges
There are a host of charges that can be levied on your Savings Account, ranging from PIN regeneration fees to cross-currency mark-up, monthly fees and many more. In addition to this, you have your maintenance charges to consider that is likely to be debited from your account every year.
It is a good idea to familiarize yourself with these charges by reading the fine print carefully. After all, the whole idea behind opening a Savings Account is to save money.
6. Always seek good customer service
Customer service is of absolute importance in the world of banking. In case you run into any trouble, you should be able to contact the customer support immediately and have them resolve the issue. Whether it is regarding stolen debit card or unable to transfer funds, you should ideally work with a bank that is known for its world-class customer service.
While it is a great decision to open a Savings Account, it is quite important to choose the right bank. You need that perfect mix of attractive interest rates, debit cards & lifestyle benefits, and quality customer service. Therefore, depending on your personal habits and goals, choose a bank best suited to meet your needs. Research your options thoroughly and the efforts will be worth it.