We all must know by now that bank account is a service provided by banks where the investors get a space to put their money in safekeeping instead of home where there could be less safety and security. Having an account also makes it easier for a person to save money or use that money for investments. It is convenient for an investor to draw or access money from the bank rather than fishing out for cash within your homemade reserve where you are in a constant fear of your money getting stolen.
Types of bank accounts that a person can invest in
- This account, as the name suggests, are made for regular transactions.
- These accounts are used mostly by businessmen, companies, organizations etc.
- Current accounts do not earn any interest and they do not have a limited number of transactions that can be made.
- Again, as the name suggests, its intention is to help an individual save
- This account helps the person to deposit and transact money per their convenience as they can get interest from it
- An employee or anyone with a steady income can benefit from this account though they put a limited number of transactions that can be made from it in a month.
Recurring deposit account:
- In an RD the holder has the ability to make deposits at a regular interval. The account holder also receives returns on their investments
- It allows the account holder the flexibility and eases with their deposits.
- It is ideal for people who choose not to invest a large sum of amount in one go.
Fixed deposit account:
- Fixed deposit helps the user to deposit a large sum of money in a bank for a particular time period.
- Here the interest rate of your deposit is higher than that of your savings account.
- Though deposited money cannot be withdrawn before the decided maturity period a person can break the fixed deposit with a lowered interest with which he had actually made the FD.
Why do you need a bank account?
Having cash on hand is necessary and useful but there are many benefits to having an account. The prime reason for having a bank account should be security. Physical cash stored at home is prone to theft, natural disasters and accidents. Having a bank account is much more convenient than keeping it at home. You can access money and can also pay for services with the bank provided debit card whenever you want. Purchasing goods online also becomes easier when you have an account. Another reason to have a bank account is that you can earn interest on your savings which you won’t get if you keep cash at home.
Dos and don’ts of opening a bank account
- Decide well about your requirements before opening an account. (Current, Savings, RD, FD)
- Always opt for internet and mobile banking after opening an account
- Keep a check on your spending by updating your account at regular intervals
- Opt for a debit card so that you can dispense cash from the ATMs at the time of your need
- Maintain a minimum account balance in your account
- Do not ever disclose your account password to anyone and keep its information safe to avoid theft
- Do not log in from a shared computer. If you have to, never forget to log out of your account
- Don’t get caught in the scams of fraud calls from people asking you about your bank details
Having a bank account not only allows you to save your hard earned money but it also keeps a check on your spending pattern. By doing so you would be able to stabilize your expenses so that concentrating on reaching your long-term financial goals become easier.
Having savings is absolutely necessary. But you need to invest in other options for a financially secure future. See if you have good money health with a money IQ report.