In India, each individual features a bank account. Banks square measure undeniably in an exceedinglyll|one amongst|one in every of} the foremost trustworthy money establishments in our country and that we don’t consider before depositing our cash in a bank. With increasing investment avenues and other people making an attempt to optimize their savings, many folks are curious if saving cash during a bank could be a wise plan.
Advantages and downsides of saving cash during a bank
Last week, I had associate enlightening discussion with an acquaintance World Health Organization has been a banker for over a decade. after I expose the question to him, he gave ME an incredible perspective on the subject. Sharing it with you as a solution to your question.
Advantages
- You earn interest over time – though the interest rates square measure low, it beats keeping cash reception. Over time, cash during a bank account will accrue interest.
- Your cash is insured – the govt ensures that every investor is insured up to Rs.1 100000 for principal + interest on deposits control by him during a bank.
- Quick access to funds (liquidity) – Life is unpredictable and liquidity is a crucial component in today’s times. cash {in a|during a|in associate exceedingly|in a very} bank is quickly accessible via an ATM or e-wallets, etc.
- Your cash is safe – Keeping cash reception could be a risk – thieving, fire, etc. Since a bank holds deposits of multiple customers, it takes most precaution to stay it safe.
- Minimum balance needs square measure low – whereas there square measure premium savings accounts with high minimum-average balance needs, you'll usually open a bank account with as very little as Rs.1000.
- An ideal place for your emergency fund – one amongst the pillars of a financially freelance life could be a sturdy emergency fund that's simply accessible. A bank account, with all the options mentioned higher than, could be a good spot to stash your emergency fund.
Disadvantages
- Returns square measure restricted – As compared to different avenues wherever you'll invest your cash, a bank account supply lower returns. whereas it compensates with liquidity and security of your funds, if returns square measure your goals, then you'll think about different choices.
- Withdrawal limits – Most savings accounts have withdrawal limits. whereas most folks aren't responsive to it since we have a tendency to ne'er reach the limit, you can not use your bank account sort of a business account.
- Fees and charges – If you don’t maintain the minimum average balance, then the bank will charge a non-maintenance fee. Also, some banks levy different charges that you just have to be compelled to remember of before gap the account.
- Temptation to pay – quick access to cash conjointly means that associate magnified temptation to pay it. Hence, most of the people elect term deposits with a bank that doesn't replicate within the bank account and needs a further step of breaking the deposit to access the funds.
As you'll see, there square measure execs and cons of saving cash during a bank. What you select ought to be supported your money goals.
Post a Comment for "Advantages and Disadvantages Are There to Saving Money in a Bank"