Saving account

Introduction
Let us consider the story of the twin brothers. On their birthday, each
of them was given Rs. 100 by their parents. While one of them kept
the sum in his pocket and used it for occasional expenses, the other
deposited the money in a bank, with simple interest at a rate of 10%.
At the end of the year, while the brother who kept the money with
him was out of money, the other one had Rs. 110 in his bank account.

This is a simple story to explain the concept of Saving Accounts and

interest rates to children. But it is a perfect example that
demonstrates the importance of a Savings Account, and how it can be
beneficial to you.

wat is a saving account

This is the most basic type of account you can open at any bank. A
Savings Account, by definition, allows you to deposit your money, safe
with the bank, so you don’t have to carry it around with you or hide it
in that rusted old steel safe at home. Don’t worry, you can withdraw
these funds when you need them.
Savings Account are one of the most liquid investments, so it is easy
to use them when needed for conducting transactions. This means
that compared to regular investments, you can easily withdraw funds
from your Savings Account, anywhere, anytime.

In fact, you can also use an online Savings Account to make the entire
process, of operating your account, mobile. These online accounts are
usually high-yield due to higher interest rates, and you can operate
them over the internet, using your PC, laptop, or even your smart-
phone.
Why do you need a Savings Account?

A Savings Account is a virtual vault that holds your money. However,

unlike a Fixed Deposit, you can access this money whenever required.
But that’s just a small aspect of why having a Savings Account is
important.
You need a Savings Bank Account to make and receive payments, pay
your credit bills, make investments, etc. You can use your account to
pay for utilities such as electricity, and even mobile phone recharges.
And, quite simply, you need a Savings Account to save your money,
from theft, misplacement, and damage (calamities can strike
anytime), because one can only store or carry a limited amount of
cash without a constant feeling of apprehension.

Types of saving account

1. Traditional or Regular Savings Account

Good for: People who need to save money for the short or long term
and aren’t as concerned about getting the best interest rate,
expressed as the annual percentage yield (APY).
Traditional savings accounts are what you may immediately think of
when you consider where to save. These are the savings accounts you
typically find at traditional banks or credit unions.
These types of savings accounts generally allow you to earn interest
on your money, although they usually pay lower rates than other
savings products. Many banks and credit unions allow you to open a
regular savings account with a low minimum deposit.

Traditional savings accounts typically allow you to make up to six

monthly withdrawals (not including ATM withdrawals or in-person
withdrawals at a branch) before incurring a penalty. The relaxation
of Regulation D restrictions in 2020 removed the six-withdrawal limit,
although your bank or credit union still has the right to charge you a
fee for exceeding the monthly limit.
Banks and credit unions may allow you to manage your account
online, via mobile banking, by phone or at a branch.
If your bank is insured by the Federal Deposit Insurance
Corporation (FDIC), then your deposits are insured for up to $250,000
per depositor, per account ownership category, in the event of a bank
failure. The National Credit Union Administration (NCUA) provides
similar insurance for federally chartered and most state-chartered
credit unions.
Pros
• It’s usually easy to open a regular savings account at a branch,
and some banks allow you to do so online.
• You can earn interest on your savings to grow your money.
• You can visit a branch if you need help or want to deposit cash.
Cons
• The interest rates are usually low compared to other savings
options.
• Monthly maintenance fees may cancel out interest earnings.
• Additional fees may apply for excess withdrawals.
2. High-Yield Savings Account

Good for: People who want to earn a more competitive rate on

savings while minimizing fees.
High-yield savings accounts—typically found at online
banks, neobanks and online credit unions—are savings accounts that
offer a higher APY compared to regular savings accounts. This is one
of the best types of savings accounts to maximize your money’s
growth.
Online banks often offer different types of high yield savings accounts
to attract savers who want to earn a better interest rate than what is
found at brick-and-mortar banks and credit unions. This type of
savings account may be appealing if you’re comfortable managing
your account via website or mobile banking versus visiting a branch.

High-yield savings accounts are FDIC or NCUA insured, just like

traditional savings accounts. In addition to offering better rates,
online banks tend to charge fewer or lower fees, including monthly
maintenance or excess withdrawal fees.

Pros
• You could earn a much higher interest rate compared to
traditional savings accounts.
• Online banks typically have lower minimum deposit
requirements to open an account.
• You’re less likely to be charged a monthly fee at an online bank.
Cons
• No branch banking access means you can’t deposit cash directly
into your account at a branch.
• Transferring money between an online savings account and
accounts at another bank can take up to a few days to process.
• You may or may not have access to your money via ATM,
depending on the bank.
3. Money Market Accounts

Good for: People who want to earn interest on savings while having
more options for accessing their money.
Money market accounts (MMAs) combine features of a regular
savings account with features of a checking account. You can find
these accounts at brick-and-mortar banks, online banks and credit
unions.
These accounts, which may also be called money market savings
accounts or MMSAs, allow you to earn interest on your savings. Rates
are typically better than regular savings accounts and some offer
rates similar to high-yield savings accounts. You may also be able to
write checks from your account or access funds with an ATM or debit
card.

Similar to regular or high-yield savings accounts, banks can impose a

fee if you make more than six withdrawals per month, even though
the relaxation of the federal Regulation D restrictions now allows for
readier access to your funds. Going over the monthly limit could
trigger a fee or result in the institution closing your account if it
happens frequently.

Pros
• Money market accounts can offer better rates than other types
of bank savings accounts.
• You may be able to write checks from your account or access
your money using a debit or ATM card.
• You can open money market accounts at traditional banks or
online banks.
Cons
• A higher minimum deposit may be required to open a money
market account.
• Interest rates may be tiered, meaning you’ll need a higher
balance to earn the best rates.
• Banks may charge a monthly fee for money market accounts.
4. CD Account

Good for: People who want to earn competitive rates and won’t need
to access their savings right away.
Certificates of deposit (CDs) are time deposits, meaning you agree to
leave your money in the account for a set period. During that time,
your money earns interest and, when the CD matures, you typically
can withdraw your savings or roll it into a new CD. That sets these
accounts apart from other types of savings accounts since there’s a
time factor at work.
You can find CDs at traditional banks and online banks. Between the
two, online banks tend to offer better interest rates. CD terms
typically range from as short as 30 days or as long as 60 months, with
longer terms usually boasting higher rates—although not always,
especially in a lower interest rate environment.
CDs are best for the money you know you won’t immediately need
since banks can charge an early withdrawal penalty if you withdraw
your savings before the maturity date. Creating a CD ladder of
multiple CDs with varying maturity dates can offer a work-around for
this issue.
Pros
• CDs can offer above-average interest rates for savers pursuing
short- or longer-term goals.
• There are typically no monthly maintenance fees involved with
CD accounts.
• CDs at online banks may offer lower initial deposit
requirements.
Cons
• Withdrawing money from a CD before its maturity date may
trigger an early withdrawal penalty.
• CDs at traditional banks tend to offer lower interest rates than
online banks.
• Putting your savings into a longer-term CD ma

5. Cash Management Account

Good for: People who want to keep cash available to invest in their
brokerage or retirement account.
Cash management accounts are different from other types of savings
accounts because they’re not specifically designed for saving. Instead,
these accounts let you hold cash you may plan to invest in a taxable
brokerage account or a retirement account.
Online brokerages and robo-advisor platforms may offer cash
management accounts to their investors. The money held in the
account can earn interest, often at a higher rate than what you’d get
at a bank.
Depending on the brokerage, you may get all the standard features
you’d expect with a checking account as well. For example, you may
be able to write checks, pay bills or transfer funds to accounts at your
bank.
Pros
• They’re a convenient way to earn interest on money you plan to
invest.
• Cash management accounts can offer benefits and features of
both checking and savings accounts.
• Accounts may offer higher-than-normal FDIC coverage limits by
partnering with multiple banks.
Cons
• High-yield savings accounts could offer better interest rates on
the money you’re saving.
• Since they’re attached to online brokerage accounts, you may
not have access to branch banking.
• These accounts aren’t always covered by FDIC insurance.
6. Specialty Savings Account

Good for: People who want accounts tailored to specific savings goals.
Specialty savings accounts are designed to help you reach specific
savings goals, rather than being a catch-all for money you don’t plan
to spend. And in some cases, they can be intended for a specific type
of person, rather than a savings goal.

For example, there are different types of savings accounts for minors.
Three types of savings accounts you might set up on behalf of a child
or teen include:

• Kids’ savings accounts

• Custodial savings accounts
• Student savings accounts
You can also set up different types of education savings accounts,
including 529 college savings accounts and Coverdell Savings
Accounts. These two types of college savings accounts allow you to
set aside money for higher education expenses on a tax-advantaged
basis.
Then there are different types of retirement savings accounts you
could set up for yourself, including Traditional and Roth Individual
Retirement Accounts (IRAs) and IRA CDs. Meanwhile, you may also
open an account designed to help you save for healthcare: a Flexible
Spending Account (FSA) or Health Savings Account (HSA).
Finally, there are other types of savings accounts to have, depending
on your needs. For instance, you may open a Christmas Club savings
account or a home down payment savings account to hold money for
those goals.

You should be able to find most of these accounts at banks, credit

unions, brokerages or investment companies. In the case of a Health
Savings Account, you’d only have access to one of those if you have a
high deductible health plan.

Opening one or more specialty savings accounts may make sense if

you have a singular purpose for saving money. Just keep in mind that
there may be restrictions on when and how you can withdraw those
funds later.

Pros
• They can help you save money for a variety of specific financial
goals.
• Specialty accounts can earn interest to help you grow your
money, just like other savings accounts.
• You may pay low or no monthly maintenance fees depending on
the account.
Cons
• Some specialty accounts, such as IRAs, 529s and HSAs, have
strict tax rules for making withdrawals.
 • The interest rates you earn for child savings accounts, student
accounts or Christmas Club accounts may be lower than high-
yield or even regular savings accounts.
• Specialty accounts may have restrictions on who can open
them.

HDFC

Housing Development Finance Corporation Limited is an Indian

financial services company based in Mumbai. It is a major housing
finance provider in India. It also has a presence in banking, life and
general insurance, asset management, venture capital, realty,
education, deposits and education loans.
It was founded in 1977 with the support from India's business
community,[9][10] as the first specialised mortgage company
in India and main company among HDFC group of
companies.[9][11] HDFC was promoted by the Industrial Credit and
Investment Corporation of India (ICICI).[12] Hasmukhbhai
Parekh played a key role in the foundation of this company which
started with the main aim of solving the housing shortage in India and
started rising steadily thereafter.[9]
In 2000, HDFC Asset Management Company launched its mutual fund
schemes.[12] In the same year, IRDA granted registration to HDFC
Standard Life Insurance, as the first private sector life
insurance company in India. Currently it operates in India, Kuwait,
Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates and
United Kingdom.