Savings accounts are to financial matters what doctors’ appointments are to health: you know you have to do it, you know it makes sense, but it’s just so damn boring. Who wants to take care of things, why can’t they just take care of themselves?
But with minimal effort, you can ensure a safe financial future for yourself, and the process is not as complicated as it would appear. Besides, it’s worth it, because there are many reasons to open a savings account, which if you read, will convince you that you should take the step yourself:
1. Economy, economy, economy
Maybe our nation’s economy was never predictable or never particularly safe, but that is all the more true now. In the past eight or ten years, you yourself have been witness to the constant fluctuations that our economy has gone through. No job, no stock market investment, no provident fund can quite offset the risk. A savings account ensures that some of your money is periodically kept safe, so that if that rainy day comes, you are safe and dry.
2. Personal crises and problems
No one likes to think it, but we may have problems and emergencies in our lives that will need money to solve. Crisis can happen to anyone. Savings account are a permanent store of money – you can make deposits as often or as rarely as you want, and the money is safe over there. So if that room burns down, you know where to go.
3. The low interest is an advantage
Most complaints around savings accounts centre around the low interest that money put in them earn. Yes, the interest is low (at a constant rate by the Reserve Bank which is not changeable depending on each provider), but you should actually view this as a good thing. Research has shown that the low interest of savings accounts is a positive – it means that you won’t have to worry about interest, or use this account as a money-earner. It is not going to gain you any additional money; that’s not what it’s for. It’s just to keep your money safe (banks use savings account money in ways that keep it safer than other investments, as your research will show you). It is a stable guarantee at stable prices and stable rates of return. That’s why, no matter how much time passes or times change, savings accounts are an essential.
As we discussed above, savings accounts are different from other investments in good ways. Other investments, while geared toward wealth building, will not make your money easily accessible when you need it. You cannot instantly cash in an investment. But with savings accounts, your money is in money form, and while some providers have a monthly limit on number of withdrawals, you can still do this with relative ease – and find your money, in liquid form, waiting for you.
5. Good habits
Yes, savings accounts do earn you money that you wouldn’t earn by keeping the same amount of money at home, or locked in your almirah. But more than anything, by putting in a little bit of money (savings accounts have no “minimum amount” to put in, usually) every month, you are creating the habit of saving money, of healthy financial habits.
Low cost, low effort, low risk, and many gains: you really don’t need any other reason. Make a savings account today and notice the benefits yourself!