3 MinsMar 13, 2023
For most of us, our introduction to banking has been on similar lines – 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 reasons like 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.
But what happens if you end up having too many savings accounts? It becomes difficult to maintain and regularly transact in each of them. Such unused accounts can become a cause for stress over time.
Here are four reasons you shouldn’t leave your savings account unused for a long time:
Penalties by the bank
Most savings accounts require you to maintain a minimum balance in your account. On failing 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 in the account to maintain a minimum balance.
The account becomes dormant or inactive
Your savings account is considered 'inoperative' or 'dormant' by the bank after 24 months of transactional inactivity. When this happens, you are not allowed to access your account until and unless 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 such a situation, it is advisable to keep transacting through your savings account at regular intervals.
Also Read: [A Savings Account for all your needs]
Losing out on investment opportunities
The savings you accumulate in an Easy Access savings account earns interest over time. Also, you can invest easily using a Savings Account in say, an Auto Fixed Deposit that helps you earn more interest. However, if your Savings Account is dormant, you may lost out on this automatic savings and the opportunity to earn higher interest returns. Thus, you end up losing 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.
Keeping your Savings Account is easy as all it requires is one transaction in a year.
Having a savings account is one of the most preferred ways of safeguarding and increasing your hard-earned money. You can earn 3 to 3.5% interest per annum on your daily account balance via Axis Bank's Easy Access Savings Account. The Easy Access account gives you access to benefits like a linked debit card and the ability to pay using multiple digital channels like Unified Payments Interface (UPI), National Electronics Funds Transfer (NEFT) or Real-Time Gross Settlement (RTGS).
You can also diversify your investment horizon by starting a trading and Demat account or a Systematic Investment Plan (SIP) through a mutual fund.
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.