The first step of your financial journey usually starts with opening a savings account. This helps you deposit your hard-earned funds in a place that is safe and accessible. However, limiting a savings account’s use solely for transactions overlooks the host of benefits it offers. This oversight means missing out on opportunities to grow your funds, plan for the future, and achieve financial stability.
A savings account, when used wisely, can be a powerful tool for managing your finances. It can help you earn high interest, beat inflation, save for specific goals, and even provide a financial buffer for emergencies. Following are some smart ways to leverage your savings account features to support and enhance your financial health.
A way to start investing
Your savings account can be the starting point of your investment journey. By leveraging its features, you can book Fixed Deposits (FDs) and Recurring Deposits (RDs) to earn more returns.
You can even automate investments into mutual funds through Systematic Investment Plans (SIPs) directly from your bank account. The autopay strategy not only helps build a disciplined investment habit but also ensures you never miss a payment date, thus leveraging the power of compounding to its fullest.
Boost your emergency funds
Your savings account is the perfect place to keep emergency funds. It combines easy access to funds when you need them most with the benefit of earning interest.
It is ideal to save enough to cover three to six months of living expenses. This liquidity is crucial in emergencies as you have a financial buffer to rely on without the need to liquidate investments prematurely, which might come with penalties or losses.
Earn FD-like interest on your surplus funds
Although your savings account already earns interest, you can opt for an auto-sweep facility and maximise returns on idle funds.
For instance, when you open an Indus Multiplier Max Savings Account, any excess balance over a threshold of ₹20,000 automatically converts into fixed deposits in multiples of ₹1,000. If there is a shortfall in your bank account for any debit, a portion of the linked fixed deposit is used to cover it. You incur no penalty for premature closure.
You can instantly complete the online savings account opening process by furnishing your Aadhaar and PAN details. Complete all the formalities from your home and enjoy FD-like interest rates along with the liquidity of a savings account.
Initiate Goal-based savings
You can open multiple savings accounts each dedicated to a specific goal. This method organises your finances and provides a clear picture of how close you are to achieving each goal. Various financial goals can be achieved through the effective utilisation of a savings account such as:
| Goal-based savings one can do with a savings account | Purpose |
| Education | Save for tuition fees and educational expenses. |
| Travel | Accumulate funds for vacations. |
| Emergency fund | Build a safety net for unexpected expenses. |
| Requirement | Plan for financial stability in your golden years. |
| Homeownership | Save for a down payment or home improvements. |
| Health and wellness | Save for healthcare and wellness expenses. |
| Personal development | Invest in self-improvement activities. |
Through this segregation, you get a structured way to allocate funds for various targets.
Save more through cashback and rewards
By strategically utilising your savings account for everyday transactions, you can earn cashback and rewards. This means every swipe of your card and online payment turns your purchases into opportunities to save.
Various transactions may qualify for cashback and rewards such as:
●Online shopping
●Dining out
●Mobile recharges
●Fuel purchases
●Travel booking
Over time, these benefits can accumulate to a substantial amount, which means you get more from your money with minimal effort.
In a nutshell
Your savings account features can be used strategically to ensure financial stability and growth. You can earn FD-like interest on surplus funds, save for different goals, build a contingency fund, and even start investments.
Make sure to explore and utilise these features to their full potential so that your savings work as hard as you do. Let your savings account be more than just a tool for transactions; make it an important part of your financial strategy.