Saving money isn't always easy. There are several pitfalls and mistakes that could put a dent in your savings goals. From overlooking tax breaks to not having a specific savings goal, these common pitfalls can eat away at your hard-earned savings. These savings blunders can be avoided with some tips.
Mistakes to avoid with your Savings Account
1. Not setting a specific target
You need to be focused on a defined savings goal, whether that's an emergency fund, down payment for a house, vacation, retirement, etc.
Having a specific amount and timeline in mind makes it easier to know how much you realistically need to set aside each month. It gives your savings efforts structure and motivation.
2. Not maintaining the minimum balance
Most Savings Accounts have a minimum balance requirement. This amount might be as low as ₹1,000, depending on your bank and the kind of account you have. The bank might charge a penalty if you don’t have the minimum required amount in your account. So, make sure you always maintain the minimum balance requirement for your Savings Account. The higher the balance amount in your Savings Account, the higher will be the interest you earn on the balance.
3. Ignoring account related fees and charges
Most Savings Accounts have fees and charges for services beyond a certain limit, for example, cheque book, ATM withdrawals, etc. Be aware of these terms and conditions and plan your banking transactions accordingly so that you don’t end up paying high fees.
4. Not monitoring and adjusting regularly
Remember that your financial situation is dynamic and ever-evolving. You should periodically re-evaluate and adjust your savings strategy as your circumstances change to stay on track. This can help you maximize returns from your savings and investments.
Also Read: 6 things to consider before opening a Savings Account
Conclusion
Building up solid savings isn't easy, but avoiding simple mistakes can speed up your progress. The aforementioned tips can help you avoid common Savings Account mistakes. Remember, saving is a marathon, not a sprint - so be patient, stick with your plan, and don't let avoidable common saving blunders keep you from reaching your goal.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
