Why Savings Account Saves the Day
Many people forego the need to save. But, as wise men have already taught us, saving something now better equips us for the future. While a savings account may not be as popular nowadays, it might still be worthwhile taking a look at such bank product.
Types of savings account
As its name implies, savings account lets you pool money under your name. It could be an individual or joint (with a friend, relative or partner) account. Aside from this, there are also particular types you might want to consider.
High-yielding savings account
These accounts offer higher interest rates. This is a good type of investment as it is very low-risk. The only downside is that there might be a higher minimum deposit required. Sometimes, high-yielding savings accounts are also exclusive to high-earners.
Fixed interest account
Often called fixed deposit or term deposit account, this particular bank savings product also offers higher interest rates. However, there is a fixed term by which one can withdraw money from these accounts. The good thing about it is that there are options for such duration periods. One can go for short-term accounts (e.g. 1 month to 3 months) or long term ones which can go up to 5 years.
Requirements for opening a savings account
Due to laws related to preventing money laundering, banks often have strict requirements when it comes to opening a savings account. Common required documents include your NRIC, birth certificates and/or Passport. Banks may also require that applicants 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 require that you maintain a regular deposit amount in order to enjoy higher interest.
Benefits of maintaining savings accounts
There are perks of having and maintaining your very own savings account. Some of them are as follows:
It’s hard to look for money when you actually need it. Having a deposit account enables you to use funds in case of emergencies. You don’t need 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. It enables the lender to 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. The only downside is that it only provides a small income. However, it really gives a person the chance to earn money on a regular basis.
It’s never too late to start preparing for your future. Consider putting away small amounts in your savings account regularly to secure your finances. No one can tell if there might be economic upheavals in the next few years, so it’s always better to be more than prepared.