Got a savings bank account? Here's how to maximise its benefits
Starting your financial journey
More often than not, a financial journey begins with opening of a savings bank account. While the primary purpose of a savings account is to provide a safehouse for money, it also helps in creating a relationship with the bank, which further gives the investor access to different investment avenues. Here are some simple ways to make the most of your savings bank account.
The savings bank account can be used to set up systematic transactions, such as SIPs or bank RDs for a particular date of the month and a stipulated time period. A 3-in-1 investment, trading and demat account can be opened by the account holder to invest in securities. Investment in PPF, FD (using sweep-in facility), insurance and other investment products can also be facilitated via net banking. Some banks have their mobile apps too. For example, Kotak Mahindra Bank allows customers to start investments from scratch through their phone app itself.
Set up bill payments
The savings bank account is like your personal, custom-made cash management system. Third party utility bill payments such as mobile, DTH bills, tax payments, loan EMIs, insurance premium can be paid seamlessly and securely. Many Internet banking portals provide a quick snapshot or financial dashboard of the customer for all investments mapped to the bank account. Again, some banks provide this feature in their mobile apps.
Income tax compliance
The savings bank account records the income earned by an individual as well as the expenses incurred. It is easy to trace how assets have been funded from a matching income. The annual bank statement provides a record of the total income earned (by way of salary/gift/dividends/interest/rent/profit etc) and hence becomes a crucial document for income tax compliance.
Leverage relationship with the bank
The banking relationship can be stepped up to avail other benefits offered by the bank, depending on the size of the account. Credit cards, pre-approved loans, overdraft facilities, discounts on certain purchases, waiver of service charges, invites to special events, coupons and vouchers are just a few of these.
The bank account can be linked to digital payment applications like BHIM, Google Pay or Paytm to make payments. These can be used to pay your bills too and even transfer money to other bank accounts very conveniently.
Also keep in mind
To establish a strong banking relationship, one should not maintain more than two accounts. If any of them remains inactive, it may not go down well in your customer records.