Students can greatly benefit from a savings account. While there are many other investment options, a savings account can prove to be handy for students by providing not only them but also their parents with multiple benefits. Some of the most common benefits that can be drawn from a savings account for students are as follows:
Savings and security: A savings account is one of the most secure ways of storing the funds required by the student at a particular place. It serves two purposes of saving money and keeping it safe all at once. The funds deposited into a savings account would stay in the savings account until a withdrawal is made. In addition to that, the funds collected in the savings account are liquid. It means that these funds can be withdrawn at any time which is very convenient.
Minimum balance requirement: Most of the students’ savings accounts do not ask for a minimum deposit to be made while opening the account. There is no compulsion on a students’ saving account to maintain a minimum balance either which is the case with several other types of accounts. These accounts are zero balance accounts. No penalties would be laid on the account in case of zero balance. This is an advantage that comes only with students’ savings accounts as in case of other savings accounts, a minimum balance needs to be maintained every quarter. Not following this requirement leads to penalties, which is not the case with students’ savings account.
Income generation: In addition to being a safe vault for all the funds present in the account, a students’ savings account can also generate income through the interest earned on the balance present in the account. Different banks offer different rates of interest. Opting for a savings bank account with a higher rate of interest can provide the student with higher savings.
Value-added services: Different banks provide a wide variety of value-added services. Some examples include reward points that can be redeemed on various brands, cashback offers, etc. Choosing to open a student savings account with a bank that provides the best of these services can add extra value. Along with these, facilities such as net banking, checkbooks, passbooks, ATM cards, etc. are also made available when one opens the savings account that helps in payments through a variety of modes.
Achieving saving goals and transaction fees: Having a savings account can enable the students to save more efficiently because of all the benefits that come with the savings account. Regular contributions into the account can help the students and parents save for any future goal. Regular deposits can be made. In most cases, students’ savings accounts have no transaction charges on the first five to ten transactions. The charges levied after that could be free or be very nominal. Some bank accounts also provide free transactions for the first 6 months post which very nominal charges would be levied on transactions.