If you want a space to stash some cash for short-term objectives, choosing the right account type is important. Different types of Bank Accounts are accessible to us at varied interest rates. However, you need to consider other features before deciding to open one. Additionally, Certificates of Deposit and Money Market Accounts provide cash return as interest.
Tips for choosing the right account type
Maximising your interest earnings may be a priority. But there are several factors you need to consider before you open a Bank Account:
Timeline
If you are building an emergency fund, you expect instant access to them. Hence, high-interest Bank Accounts and Money Market Accounts are ideal. However, if you do not need access to your money for several months or years, CDs can be a good way to lock in a high-interest rate.
Flexibility
By opening an account, you benefit from easy fund access from anywhere, thanks to online channels. You can use it to check the account balance, transfer funds, pay bills, and buy necessary items by scanning the QR code for UPI payments.
Saving habits
CDs, Money Markets, and Savings Accounts usually have minimal balance requirements. However, suppose you do not have enough funds to make a deposit. In that case, you can consider opening a Basic Savings Bank Deposit or Zero Balance Account, eliminating the need for minimal balance and deposit requirements.
Associated costs
Every account type charges monthly fees to depositors. Money Market Accounts are worthwhile if you can meet the requirements to avoid a fee. While a Savings Account may involve Digital Banking, low average balance maintenance, and other facilities, it is still the most popular and common banking product as the Savings interest rates are ideal.
Benefits of financial discipline
Savings Accounts are a great way to safeguard your money for short-term goals, such as emergency funds, vacation pay, or a Loan EMI. There may be situations where saving makes more sense, as you need not worry about losing funds due to market situations. You can invest in your children’s education, parent’s medical care, and other priorities.
Steps to open a Bank Account
If you want to deposit your money securely, then open a Bank Account. These offer interest rates as high as 7% per annum if your account balance exceeds Rs. 4 lakh but is less than Rs. 5 lakh. Go online, fill in your details, complete the KYC process, and activate your account. You receive the interest income every quarter. Equipped with bespoke facilities, it provides personalised banking services to fulfil every individual’s need.
Conclusion
Depending on your financial situation and goals, research and compare several investment options to determine which one best suit you.
