As the name suggests, it’s an account directed at saving money. A personal savings account is generally for money that you do not intend to use for every day expenses. A savings account provides principal security and a modest interest rate. A savings account is considered to be the most liquid investment one makes. Its main purpose is personal saving.
Banking and banking terms leave many confused and in doubt. There is no denying that each one of us needs to deal with banking responsibilities at some point or the other. The field of banking is vast and includes various different elements. Knowing these, and understanding the difference between each is not only beneficial but also a must. One cannot ignore banking responsibilities so it is better to not just take them up but with full understanding and knowledge. There are different kinds of accounts that one can open in a bank. Let’s take a look at a personal savings account.
It has a lower interest rate as compared to other investments; but provides the convenience of transacting money from local branches, internet or an ATM machine. A saving account is ideal for a person who wants have a personal saving while earning a modest amount of interest. Another advantage of a savings account is that it requires a low investment to start with. Thus, it is convenient for people just starting out with their career. Additionally, it provides the benefits of automatic deductions for bill payments and minimal monthly fees.
On the other hand, having an easy access to money and convenient transaction options, a personal savings account is not the best option for long-term savings. The convenience and ease leads to temptation! Also, the interest rate is much lower to other investment options. A minimum balance must be maintained to avoid charges, so people with unstable incomes or fluctuating salaries are not benefited from a savings account.
Looking at the ever increasing prices of everything around us, personal savings have become a must to be able to lead a comfortable life and secure the future. Savings must be started from the very beginning. The very first job should be the start to the very first saving. A savings account is a great start before one has the capacity to go in for bigger investments.