Why A Saving Account Is Better Than A Piggybank?

Time to read: 5 Mins | July 16th, 2018

“Don’t save what is left after spending, but save before you spend” – Warren Buffett

If you grew up in those good old days where your parents gave you pocket money. And you’d save every rupee in your piggy bank. At the end of tenure, we saw that every penny saved became a large amount.

Where do you stack your surplus money now?

Do you still have a piggy bank?

If you do, do you know merely saving in a piggy bank isn’t enough to meet all your financial goals. Because the inflation bug has the power of erode the value of money.

On the other hand, a Savings Bank Account is the most basic type of account where you can deposit your money and withdraw as and when you need. Money set aside in a piggy bank lies idle. Whereas, savings in a Savings Bank Account can earn you interest.

Yes, most of the banks offer interest of around 3% - 6% per annum. In short, your money is put to work to grow wealth for you. And saving this hard-earned money can enable you to lead a healthy financial life.

Section 80TTA of the Income Tax Act, 1961 provides a deduction upto Rs 10,000 in respect of interest income earned on savings account. Further, for senior citizens, this year in the Union Budget 2018, the exemption for interest income earned on deposits with banks and post offices is increased from Rs 10,000 to Rs 50,000.  

There are varieties of saving bank account today, with frills and no-frills, with distinguishing features catering to your need. But, it is important for you to choose the right type of savings account for yourself.

Axis Bank, for instance, offers a diverse range of savings account to serve specific needs. Here’s the list:

Basic Savings Account

This savings account offer a zero balance facility as you save. Plus, it facilitates you to transact with ease and track the account with ease with monthly e-statements, passbook, and SMS alerts.

You also get a free RuPay Debit Card, which can be used to withdraw money at ATMs and shopping. The daily withdrawal limits is Rs 40,000 at ATMs and Rs 1 lakh for shopping transactions.

The basic savings account can be opened by resident individual and Hindu Undivided Family (HUF) by furnishing the necessary documents along with the account opening form.

However, the condition to open this account is, the applicant should not have any existing savings account with Axis Bank prior to the opening of Basic Savings account. If any existing savings account is available or active, these need to be closed by the customer through a closure request. 

EasyAccess Savings Account

The minimum deposit to open this savings account is Rs 10,000 (in metros) and this is the average monthly balance requirement too.

The EasyAccess Savings Account can be opened by resident individuals and Hindu Undivided Families by furnishing the necessary documents along with the account opening form.

Prime Savings Account

This savings account provides you with enhanced access and a higher transaction limit.

The minimum amount of deposit to open the Prime Savings Account is Rs 25,000 (in metros), which is also the average monthly balance requirement. 

This account can be opened by resident individuals and Hindu Undivided Families by furnishing the necessary documents along with the account opening form.

Prime Plus Savings Account

You feel exclusive with the Prime Plus Savings Account, because you enjoy higher transaction limits, preferential pricing, and entertainment benefits.

The minimum deposit to open the Prime Plus Savings Account is Rs 1 lakh across locations. And you have the flexibility to maintain an average monthly balance, it can be:  Rs 1 lakh; or a Total Relationship Value (TRV) of Rs 5 lakh across your savings accounts and fixed deposits, for a minimum tenure of 6 months.

This account can be opened by resident individuals and Hindu Undivided Families by furnishing the necessary documents along with the account opening form.

Women’s Savings Account

This savings bank account can be opened by all women residing in India. It empowers them with financial independence. The minimum deposit to open a Women’s Savings Account is Rs 10,000 (in metros), which is also the minimum average monthly balance requirement.

All you have to do is furnish the necessary documents along with the account opening form to open this account today to become financially independent and experience simplified banking. 

Future Stars Savings Account

This account is perfect for children below 18 years –– the future stars! For children below 10 years, the account can be operated by the child’s legal guardian.

The minimum deposit to open Future Stars Savings Account is Rs 2,500 (in metros), and this is also the minimum average monthly balance requirement. However, the minimum balance requirement can be waived off if a fixed deposit of Rs 25,000 for 6 months or Recurring Deposit of Rs 2,000 for a year is maintained.

Furnish the necessary documents along with the account opening form and give your child a bright financial start. 

Senior Privilege Savings Account

This account is for resident individuals who are 57 years age or older, and the account holder will get priority treatment at Axis Bank branches. Basically, no more waiting in queues.

The minimum deposit to open a Senior Privilege Savings Account is Rs 10,000 in metros and urban centres; Rs 5,000 in semi-urban centres; and Rs 2,500 in rural centres.

To open a Senior Privilege Savings Account and to know the documents required, click here. 

Another important point is to maintain a separate Savings and Salary Account to have more organized and clear accounting.

And the Benefits of Keeping Salary and Savings Account Separate are:

Keeps you organise
Tracking expenses and streamlining budgets becomes easy. 

Consciously directs you to save
Transferring hard-earned money to a savings account helps in the planning for your financial goals.

Works as a step to make productive investments
You can opt for sweep-in deposits, flexi-deposit, SIP in mutual funds, and more! 

Addresses your liquidity needs
You can park money for contingency purposes, short-term needs, payment of utility bills, etc.

To Conclude:

Though there are numerous avenues to set aside your savings, choosing the right savings account is crucial. As mentioned earlier, a savings account is the start of your journey towards financial freedom.

And saving money in a piggy bank won’t be enough to help your money grow against inflation.

So, start your journey with a Savings Bank Account of your choice and simplify your finances.

Happy Banking!

Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm known for offering unbiased and honest opinion on investing. Axis bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN 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.