Reasons why you shouldn’t leave your savings bank account idle.
Many of us have more than one savings account. All because of changing jobs and changing cities. At some point, you stop using those accounts and hold onto only one account. Have you ever wondered what happens to those unused savings account?
Savings account is an enabler when it comes to the world of investment. Here’s why you should not leave your bank account unused.
Interest is an attractive aspect of not letting your savings account stay unused. Yes, we know not all the banks provide a decent rate but there’s nothing to worry. You can always check which bank offers attractive interest rate on their savings account. Banks like Kotak Mahindra Bank provides interest rate of up to 5%. So, it’s better not to leave your account inactive.
Read: Top Banks that offer High Interest on Savings Accounts
Once your account is tagged inactive i.e. no transactions in last 12 months, you cannot request for a debit card or a cheque book, avail internet banking or get user identity and password.
Inactive account still doesn’t have that many disabilities. But when your bank account becomes dormant i.e. no transaction from last 24 months, besides the restrictions applicable on inactive account, you won’t be allowed to change your address, contact number, email address, and avail transactions through ATMs, internet and mobile banking.
Though not all banks have this minimum balance requirement criteria, there still exists some of them where this is applicable. So, if your bank levies penal charges for non-maintenance of minimum balance, then you’re losing on that money. It’s better to use your savings account to avoid such problems.
Read: 9 Charges of savings accounts that you should know about
Most banks offer bill payment services with programs that give customers reward points. So, to keep these offers going, you should actively use your savings account for paying electricity and other utilities bill.
You cannot invest in mutual funds without an active savings account. It gives you access to financial products like recurring deposits and fixed deposits. Some banks offer you facilities to auto-sweep your idle sum lying in your bank account into fixed deposits if a sum exceeds a threshold, say Rs. 30,000. Now, if you’ll not leverage your account then what’s the point of having it. Don’t leave it inactive because facilities like auto-sweep can help you to get higher returns.
There are high chances of frauds if your account is inactive. It’s more vulnerable to phishing scams if left unused for an extended period. Such savings accounts can be used for illegal transactions, money-laundering, any of which could land a credible customer in serious trouble.
While frauds are reported even in active accounts, such scams are more easy to take place through inactive or dormant accounts.
In case of inactive savings account, the account holders are unaware that a trick has taken place in their account, as they don’t track the account regularly.
Now, this must look very unpleasant to you if you do own more than one savings account and let them be on their own. So, why don’t you check whether there’s any inactive or dormant account and look for measures to either start using it again or closing the account.
Just keep one thing in mind, that even if you have more than one bank account, you should put them to use by handling expenses, investments and savings.
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