Why Opening a Savings Account Should Be Your First Step Toward Financial Planning

For many, creating wealth seems like a distant dream. With a plethora of investment options, it’s easy to get confused about what to include in your financial plan. It’s important to understand that financial independence can be attained by focusing on the fundamentals, like choosing the right savings account. In this blog, we discuss how a high-interest savings account can play a key role in your financial plan.

What is a High-Interest Savings Account?

A high-interest savings account is a type of savings account that offers better compounded interest rates compared to standard savings accounts. In these types of savings accounts, your deposited amount grows annually, without your involvement. The accounts are safe as they are regulated by government bodies. The interest rates are generally stable and not influenced by market fluctuations. Additionally, these accounts provide liquidity, allowing you to access funds as needed, giving you flexibility and control over your finances. This makes high-interest savings accounts not only a safe investment but also a highly convenient choice for short-term savings goals.

Key Considerations for Choosing the Best Savings Account

A savings account with high interest is a smart choice for steady growth. Choosing the right savings account can be challenging, here are some things to consider when selecting a savings account.

• Interest Rates – Before investing, look for interest rates offered by banks, how often they are compounded, and if there is any limit to growing with the interest rate.

• Fees and Charges – Consider fees that can be in the form of withdrawal fees, transaction fees, or any sort of annual charges. 

• Accessibility – Ensure the bank offers mobile access to manage your savings account and provides reliable local and international coverage for seamless banking. Moreover, reliable customer support is essential for addressing any issues swiftly. Research the bank’s reputation for handling customer queries and complaints, and check if they offer 24/7 support through multiple channels.

How Do Savings Accounts Build Wealth?

A high-interest savings account makes wealth growth an effortless process. Since these accounts are not subject to market fluctuations, account holders can expect stable, predictable returns. Additionally, savings accounts are insured by DICGC for amounts up to INR 5 lakh per depositor per bank. In addition to this, an individual can access and transfer their funds easily. Savings accounts also offer liquidity, allowing account holders to withdraw funds whenever needed without penalties. Some of the other ways to grow your wealth with a savings account are:

• Access to other investment options 

Savings accounts play a significant role in your financial plan, but that’s not just the only thing you can do. Account holders (as well as non-account holders) can explore other investment options such as fixed and recurring deposits provided by the bank. They can also invest in mutual funds and equity-linked options through their banks. These investment options can help accelerate your financial goals, but it’s important to research the associated risks and key details before investing. You can also automate your investments by setting up a systematic investment plan (SIP) or recurring deposit (RD), making it easier to stick to your long-term financial strategy.

• Offers

One of the best ways to grow your wealth is to reduce your expenses, which is where offers and exclusive discounts can be beneficial. Look for banks that have offers such as cashback deals on purchases. By taking advantage of these exclusive discounts, you can enjoy a comfortable lifestyle without cutting back on your spending. Additionally, some banks offer bonuses for maintaining higher balances or linking accounts, further enhancing your ability to accumulate wealth.

Conclusion

Before beginning your journey to financial freedom, it is important to have a good financial plan along with a good savings account. Opening a high-interest savings account lets you grow your savings with low or no minimal effort while opening you up to other investment opportunities. Many banks, including DBS Bank, offer competitive interest rates and exclusive benefits, making high-interest savings accounts a great way to grow your wealth. Additionally, investing in fixed and recurring deposits is a low-risk option with the benefit of competitive interest rates. Opening an account online is simple—visit DBS Bank’s website or branch to get started.