Many people go without saving. But wise men have already taught us that if we save something now, we are better equipped for the future. Even though using a savings account to accumulate interest may not be very popular nowadays, it might still be worthwhile to actually take a look at such bank product.
Types of savings account
As implied in the name, a savings account lets you accumulate money under your name. It can be an individual or a joint (for example with a friend, relative or partner) account. Besides that, there are other particular types interesting to consider.
- Current account – A chequing account that doesn’t bear interest.
- Savings account – An interest earning account that usually doesn’t have chequing facility. Usually, the banks provide you with a wide range of savings accounts to choose from depending on whether you require higher or lower interest, a monthly statement or passbook, kids account or so on.
- Savings-cum-current account – An Interest paying account with chequing facility.
What are the requirements to open a savings account
Banks often have strict requirements when it comes to opening a savings account because they have to stick to certain laws related to preventing money laundering. Common documents required to open an account include your NRIC, birth certificates and / or Passport. Banks may also ask the applicants to show up in person before granting access to any newly opened savings account.
Expect also that there is a minimum initial deposit for each type of savings account. Some banks might also ask you to maintain a regular deposit amount in order to enjoy higher interest.
Benefits of a savings accounts
There are a lot of benefits of having and maintaining your own savings account. Some of the most important benefits are listed here:
It’s hard to look for money when you actually need it. When you have a deposit account you can use your funds in case of emergencies. You don’t have to get a personal loan just to make ends meet.
Establishes good credit standing
Getting a big loan is a lot easier when you have a solid savings account. That way the lender can be convinced that you can pay for the loan even if your savings account has a smaller amount than the desired loan.
Savings accounts can be considered one of the safest investment products.There’s really just one major downside to it: you’ll receive only a very small income due to very low interest rates..
Savings account also helps you to start preparing for your future and save for a bad times. Think about putting away small amounts in your savings account regularly to secure your finances.You never know if there might be economic upheavals in the next few years, therefore it is always better to be more than prepared.
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