Savings accounts are the safest option to keep your money
As the saying goes ‘money saved is money earned’, saving money is an essential aspect of financial planning. It is crucial to have a safe place to store your hard-earned money, and savings accounts are one of the best options for this. In this article, we will discuss why savings accounts are the safest place for keeping your money.
Firstly, savings accounts are backed by the government. In India, savings accounts are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the Reserve Bank of India. Under the Deposit Insurance Scheme, the DICGC guarantees up to Rs. 5 lakhs per depositor per bank. This means that if your bank were to fail, your deposits up to Rs. 5 lakhs would be safe and secure.
Secondly, savings accounts offer liquidity. Liquidity means the ease with which an asset can be converted into cash. Savings accounts allow you to withdraw your money whenever you need it. You can withdraw cash from an ATM or transfer funds online. This ease of access makes savings accounts a popular choice for people who need quick access to their funds.
Thirdly, savings accounts are low-risk. Unlike investment options like stocks or mutual funds, savings accounts carry a very low risk. While the returns on savings accounts are lower than other investment options, the principal amount is safe and secure. You do not have to worry about the ups and downs of the stock market or the performance of a particular mutual fund. Savings accounts offer stability and security, making them an ideal option for risk-averse individuals.
Lastly, savings accounts offer interest on deposits. You can earn an attractive 7% rate of interest* on a Unity Bank savings account (6% upto Rs 1 lac and 7% over Rs 1 lac). The interest earned is usually calculated on a daily or monthly basis, and the amount is credited to your account at regular intervals. This means that your money is not only safe but also earning some interest.
In conclusion, savings accounts are an excellent option to keep your money safe. They offer security, liquidity, low-risk, and some returns on your deposits. While they may not be the best option for those looking for higher returns, savings account benefits are best suited to those interested in a safe place for keeping money. As a responsible financial institution, we at Unity Bank emphasise the importance of savings account as a reliable and secure option to deposit your money.
*subject to change