When most of us think of the function of our savings accounts, the most obvious things that come to mind are maintaining the minimum balance, earning interest on the deposits made to the account, and perhaps opening a recurring deposit. However, there are other things that a savings account can do that most people are not aware of yet.
The information that follows will touch on the various functions of a savings account that would help maximize the benefits of the account.
1. Investing in mutual funds
Most banks offer their customers the option of investing in mutual funds directly through their savings account. Apart from mutual funds, banks also allow savings account holders the option of investing in Systematic Investment Plans (SIPs). Furthermore, the investment helps customers save on tax deductions under Section 80C of the Income Tax Act.
A number of banks offer their customers life, health, travel, and car insurance policies. Very often the premium on the insurance policies offered by banks is comparatively lower than those offered by insurance companies. Buying insurance policies from banks makes it more convenient to pay premiums and renew schemes. In most cases, the premium amount is automatically deducted from the customer’s account.
3. Paying taxes
Most banks allow their customer the option of paying taxes through their internet banking and mobile banking facilities. This also includes filing and submitting Form 26AS on the bank’s website. Very often when people make tax payments offline, they tend to face a lot of trouble.
4. Credit card
Having a savings account increases a customer’s eligibility to obtain a credit card from the same bank. Additionally, it makes payments through internet banking and does not require submission of a cheque or demand draft. This, in turn, reduces the likelihood of missing payment due dates.
5. Travel packages
A lot of banks have tie-ups with different travel agencies and offer their customers discounts on travel packages. These discounts are applicable on ticket fares and accommodation expenses. These packages are extended for both domestic and international travel.
6. Payment of mobile phone bills and utility bills
Since most banks have internet banking and mobile banking services, it makes it much easier for customers to make payments for their electricity, water, internet, and other utility bills. Additionally, most mobile service providers have an internet banking option on their websites that makes recharging mobile phones much more convenient. Furthermore, customers can also create standing instructions on the bank’s internet banking website for payment of utility bills.
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