Most people start a savings account as their very first bank account. Do you realize that the money you deposit in your savings account might help you earn interest? Each bank has a different rate of interest that you can earn on your savings. There are numerous additional methods to profit from savings accounts. However, because they lack the necessary knowledge, few people are able to take full use of a savings account. Here are 6 savings account suggestions to help you get the most out of your savings account:
Choose an account with a higher interest rate
Open a savings account with a bank that offers more enticing interest rates if you want to maximize the returns on your savings. After all, you always earn bigger returns when the interest rate is higher. Before selecting the best bank, compare savings rates online. You can earn more interest on the money you have accumulated in savings accounts with even a small increase in the interest rate.
Budget your monthly expenses
You might be curious how setting a budget relates to generating income. The solution is extremely straightforward: every rupee saved is a rupee earned. This is one of the oldest yet most practical methods for managing money to get the best return on savings accounts. You can find several ways to save money by making a budget, which will also help you comprehend your monthly spending. When you are aware of your monthly spending, you may make the most of the auto-sweep feature. You can automatically move any extra funds in your savings account to a fixed deposit using the auto-sweep feature (FD). The interest rate paid on FDs is typically between 2.80% and 5.25%, but the average bank return rate on money held in a regular savings account is from 2.75% to 3.30%. This can help you earn a better rate of return. Furthermore, you are less likely to withdraw and spend your money while it is secured in an FD. You can also use a savings account calculator.
Open a recurring deposit
The typical purpose of FDs is to generate interest on a lump sum of money. But not all of us have sizable sums of extra money lying around to lock into FDs. You can do this by asking your lender to open a recurring deposit (RD). One of the best instruments for saving you will come across is an RD. You will be able to use an RD to invest a set amount of money each month in a plan that will pay you interest on your savings. The typical rate of return on bank RDs is from 3.7% to 5.25%. The duration of the RD has a significant impact on the returns received.
Take the advantage of rewards offered on debit card
It is very likely that if you have a savings account, you also have a debit card connected to it. Well-known banks provide debit card holders with a wide range of reductions, advantages, and other perks. You might be able to earn discounts when you shop online or purchase goods from co-brands, for instance. Even some debit cards have free insurance. Over time, all of these advantages and benefits can enable you to make considerable financial savings. Utilizing such debit card incentives when making your regular purchases is thus one of the finest methods to make the most of your savings account.
Set saving goals
Most people struggle to save money, and one of the main reasons for this is a lack of discipline. Set a target to save a given sum of money in a specific amount of time. Do not forget to create reasonable short-term savings objectives that are neither too easy nor too difficult to reach. Long-term saving objectives follow the same reasoning. This is due to the fact that a challenging objective could deter you from continuing, whilst an easy aim might encourage you to procrastinate. Setting a realistic goal will help you develop the habit of routinely saving money.
Try to open two or more savings account
You can gain more advantages and manage your money more simply by opening two or more savings accounts. This is due to the possibility that you may find it difficult to prevent money from being spent if you only have one savings account. For the most part, we have our main savings account connected to online wallets and AutoPay/BillPay for different bills. It is therefore beneficial to maintain a second savings account into which you transfer any money that is left over after expenses each month. Avoid connecting this second account to any payment systems, such as UPI, and preferably don’t accept a debit card on it as well, to make your savings even more realistic.
You can increase your interest income by using these suggestions while still reaping the rewards of a savings account. While your income rises, your money stays in a liquid state and is available for use practically instantly.
