savings account

Maximizing Your Savings Potential: 4 Reasons to Keep Your Account Active

For most of us, our introduction to banking has been similar – accompanying an elder to the bank to open our first-ever Savings Account. This account would store the ‘treasures’ saved diligently in piggy banks. It marked a big moment in our lives, our first steps onto the road of financial planning and independence.

Over time, people tend to open more savings accounts for various reasons, such as better interest rates, salary accounts when they change jobs, or easy access. A savings account is one of the simplest methods of saving and compounding your money.

However, having too many savings accounts can be difficult to maintain and transact in regularly. Unused accounts can become a cause for stress over time.

Here are four compelling reasons why you should keep your account active:

Penalties by the bank: Most savings accounts require you to maintain a minimum balance. If you fail to do so, the bank can levy a penalty. To avoid such penalties and not lose out on savings account interest rates, ensure you have enough funds to maintain a minimum balance.

The account becomes dormant or inactive: After 24 months of transactional inactivity, your savings account is considered ‘inoperative’ or ‘dormant’ by the bank. When this happens, you cannot access your account until you file an application and submit your KYC documentation.

Moreover, you will not be able to use your money or any of the savings account services (including your debit or credit cards) in case of an emergency or for paying utility bills and daily expenses. To avoid this situation, it is advisable to transact through your account regularly.

Losing out on investment opportunities: The savings you accumulate in an account earns interest over time. Additionally, you can invest easily using a Savings Account with an Auto Fixed Deposit that helps you earn more interest. However, if your Savings Account is dormant, you may miss out on automatic savings and the opportunity to earn higher interest returns. Thus, you may lose out on additional income.

No more rewards and offers: Debit cards linked to Savings Accounts offer attractive deals and discounts in tie-ups with leading brands. They also help you earn reward points. Besides, some Savings Account variants also offer free personal accident cover on the debit card linked to it, provided you keep it active by swiping it. This benefit too will be lost if your Savings Account is left untouched.

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Keeping your account active is easy as all it requires is one transaction in a year. By doing so, you can avoid penalties, dormancy, missed investment opportunities, and lost rewards. So, make sure to transact through your account regularly and enjoy the benefits it offers for your financial planning and independence.

You can visit this page to open bank accounts

Disclaimer: This article is for reference only. The author’s opinions expressed in this article are their own and not necessarily those of any bank or its employees. Neither the bank nor the author can be held liable for any direct or indirect damages or liability suffered by the reader or anyone else using the information in this article to make financial decisions. Before making any major purchases or investments, consult with a financial expert.

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