SUMMARY: Putting away money in a savings account is a good option for people who want to grow their money without the impediment of a lock-in feature. However, there are several myths surrounding savings account interest rates that you must steer clear of.
Today, there is no dearth of options for individuals who want to save up and grow their money. However, many of these schemes and plans come with a lock-in period, disallowing investors from withdrawing their money when they might need it. A savings account with a high interest rate might be an answer in such situations. Unfortunately, far too many people look upon a traditional savings account as a place where their money is secure, but sits idle with no returns. Detailed below are some of the most popular myths regarding savings account interest rates, and corresponding facts you should be aware of.
Myth 1: The savings account interest rate never changes
Fact: Savings account interest rates do change! When you choose a high-interest savings account, the annual percentage yield (APY) needs to be considered, for it determines the annual interest you will earn. The APY fluctuates depending on the Reserve Bank of India’s interest rates and state of the economy.
Myth 2: Only 1 or 2 banks offer attractive interest rates
Fact: Multiple private and public-sector banks offer savings account facilities in India. Therefore it is important to look around and compare savings account interest rates, as well as features such as flexibility of deposits and withdrawal. Many online or digital savings accounts offered by leading banks nowadays have lucrative rates and low fees.
Myth 3: The interest rate is the only benefit
Fact: While an attractive interest rate may be a big draw for customers, the advantages of a savings account do not end there. Today, top Indian banks offer savings accounts loaded with features including rewards & cashback on savings account-linked debit cards, fee waivers, free ATM transactions, and much more.
Myth 4: It’s not easy to access your money
Fact: While some savings accounts do have limits in place on the number of withdrawals you may make in a certain period, not all of them do! That said, accessing your money is scarcely difficult. Thanks to online banking and a debit card, accessing your cash will, in fact, be as easy as ever.
Myth 5: Your savings are too measly to grow
Fact: This is an absolute fallacy! Remember, what you consider to be trifling contributions made every week or month, will easily add up over time, building a significant corpus of funds. The earlier you begin stashing away your savings, the better. Patience is the key!
A savings account can indeed help you save up cash without the impediment of a lock-in feature. Just make sure to do some research, including considering the APY, service fee, and minimum balance requirement among others. Finally, compare savings account interest rates offered by various financial institutions, and choose the one that will best help you meet your financial goals.
