Savings Account – Everything you need to know

Opening a bank account is easy, but it is important that you know the type of bank account you are opening. A savings account is regarded as one of the most common account types. Here, I will explain what it is and everything else you need to know. 

What is a Savings Account?

As the name implies, a savings account is an easily accessible banking account. Its primary function is to encourage short-term savings for a project, or for rainy days. 

Who is eligible to open a savings account?

Anyone can apply for one, and it takes less than 24 hours to complete opening one. This is however possible when an individual has all the required documents. Also, corporate bodies can apply to open a savings account. 

What do I get from opening a savings account?

Typically, an individual with a savings account will get an ATM card, an online banking platform, USSD banking options and access to other e-banking channels. However, the interest on this account is reduced when compared to other forms of bank accounts. For example, the interest rate common with most banks currently stands at an average of 5%. 

Requirements for opening a savings account

The requirements for opening a savings account differ from bank to bank. Every bank requires that you open one with:

1. A valid national means of ID such as Driver’s License, international passport, or the national ID card.
2. Passport photographs
3. Proof of address in form of any utility bill.
4. Some banks require an initial deposit into your account. 
5. However, several other banks offer a policy which allows you to open an account with an empty opening balance. 

Why you should open a savings account

Typically, a savings account is safe and reliable for short-term needs, making it one of the best options for a bank account. Also, this account can double as a salary account which you can use to take loans if the need ever arises. 

Cons of opening a savings account

1. There are restrictions on amounts you can withdraw in a single day. Banks have several regulations on the maximum amount, and it is important that you check it before you open an account. Also, there are also restrictions on the number of bank transfers you can complete each day.

2. There is a limit on the amount of cash deposit that can be done at a single go. However, this is heavily dependent on the bank policy.

3. Additionally, account holders do not qualify for a cheque. This is however available to current account holders. 

Conclusion

To open any account and get the best out of it, it is important that you take your time to make detailed inquiries about the withdrawal limit, interest rates and money transfer limits. These will help understand which of these banks offers the best deal. 

Take that financial step and open one now!