If you have ever withdrawn money from an ATM, you may have noticed that the prompts give you two account options to withdraw from – savings or current. Exactly what do these mean? In this article, we shall be considering all the fine details of a savings account, leaving the other for another time.

What Is a Savings Account?

A savings account is opened in a bank by a salary earner or a person who has a regular source of income in order to have interest on his/her money. It is also available to students, pensioners, and others and encourages them to cultivate a savings habit. 

Some Benefits of a Savings Account

1. It encourages a savings culture among salary earners as well as those who have a fixed income, even as the depositor earns income through the savings bank interest.

2. Because banks issue account statement for such accounts, it helps in keeping a record of the income earned by the account holder for the year.

3. The passbook attached to a savings account can be used as a means of identity and proof of residence.

4. As was discussed in the opening, a savings account can be used to make electronic money transfers to other accounts; and also allows for internet banking, online purchases and shopping, as well as cash withdrawals using an Automated Teller Machine (ATM) whenever you please.

5. A savings account also keeps a track of all your transactions. Depending on what options you prefer, they can send you transaction alerts either via SMS, email or both

6. With a savings account and good credit rating, you could also be eligible for loans from the bank you have this account with.

While different people have different reasons for opening a savings account, you can be sure that the benefits of doing so far outweighs that of keeping your money in a shoe box under your bed or in a safe in your bedroom. And if the safety of your money is what you care about, just choose a trustworthy bank with a solid track record; and there are many of such in Nigeria to be sure.

While you may not realise it, having a basic savings account means you are doing a little bit of investing because money that you save there receives some interest – no matter how little.

Think because you are not 18 yet, you cannot open a savings account? That’s very far from the truth! Follow the link to the article below to find out how to go about it. 

See Also: What Must You Do To Open a Bank Account?