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How to get the most out of our savings account

Savings account can help you do more than just transactions. Read on to find out how.

Savings account is typically the first point of contact with a bank. Your salary is credited in a savings account and you can make purchases through a bank debit card.

As it is an integral part of your investment journey, it is important to make sure that you are squeezing the maximum juice out of your savings account. Here are the some of the ways through which you can make the most out of a savings account.

High interest rate:

Savings account offer notoriously low interest rate. For e.g. the largest bank in India, SBI offers a meagre 3.25% interest on their savings account.  And as a result, the funds parked in a savings account fail to work for you. The first way to make the most of your savings account is to park your money with a high interest savings account that offers high interest rate. Banks like Kotak Mahindra Bank offers a high interest on their savings account at 6%.

Look for a zero balance account:

Many banks require a minimum monthly or quarterly balance on their savings account. And as a result, a part of your hard-earned money gets locked away in maintaining the minimum balance. The requirement of a minimum balance along with the low interest rates offered by these banks, do not let you to make the most out of your savings account. On the other hand, with a zero balance account like Kotak 811, you can use your entire balance to purchase products or invest the entire amount and earn higher returns. It is all up to you. Money won’t be just lying in your account serving no purpose.   

Sweep in facility:

A brilliant way to make the most out of your savings account is to opt for the sweep in facility. With the sweep in facility, you can enjoy financial flexibility and earn higher interest on the money lying ideal on your savings account. You just have to link multiple fixed deposits with savings account and if you have excess funds in your bank account, you can sweep in to your fixed deposits and if you need cash, you can easily withdraw the required amount. In sweep-in facility, you can have to manually place the request. This is taken care of by the auto sweep –in facility offered by the various banks. The auto sweep-in facility automatically transfers the excess amount beyond the limit to the fixed deposit and also pumps in money in your savings account if it falls below the predefined limit.

Use it as an emergency fund:

Emergencies can strike anywhere and it is better to be safe than sorry. Initially, you can use a savings account as an emergency fund. However, it will be better if you open a separate account so that you don’t mix up or spend it unknowingly on other things. Opening a bank account is no longer the same. You can open an online savings account like Kotak 811 in just a few minutes. Typically, 3 to 6 months of expenses should be available on your savings account. These funds can be used during accidents, job loss etc.

Save for financial goals:

We all have financial goals and we all face difficulties achieving it. We don’t know where to start and how to start or even understand the goals for which we want to save. Savings account can help you start saving for your financial goals. Use the auto debit option in your savings account to route a specific sum of money every month to a separate savings account. This will help you to form a savings habit. And, by the time, you figure out your goals and the ideal investment option, you will have some savings in your bank account.  

Savings account is one of the basic savings means and many people tend to overlook what they can do with their savings account. When we shop when things are on sale or bargain with hawkers for the best price for the maximum value, financial products like savings account have the potential to provide for many more facilities.

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