The course of becoming an adult and being an earning member of the family entails an individual with many responsibilities and duties. It has always been professed by our elders that as we start earning, we should start saving whatever amount that can be saved on a regular basis. The raw aesthetic behind savings relates to systematic accumulation of funds, the process which is repeated at regular intervals ensure a continuity of savings.
It is always suggested for the amount to be saved to be taken from the regular payments a person receives from his or her employer even before it reaches the individual’s wallet. This ensures that under no circumstances does the saving’s process be interrupted or stalled. Knowing the basis of savings and how the process is derived is interesting, to further understand that saving money in banks has more to it than what meets the eye. A bank is a financial institution which enables an individual to possess an account and accumulate money in it. In return for keeping funds in the account, the guardian of the savings amount gets the benefit of interest earned as or the period through which savings have been continued.
Now, if the entire procedure of savings is seen from a bird’s eye view, one would easily be able to comprehend that modern-day savings accounts in banks give its customers dual benefit in return of keeping one’s hard earned money in the institution. Not only does an individual have a guarantee and security that the amount shifted from regular checking account to a savings account is safe and well-guarded, but also the accumulated funds earn a well-deserved interest as per the rate provided by the bank and the plan under which savings have been initiated.
The basic steps one can take towards understanding the roundabout meaning about savings account is to know how it functions. It is already established that while funds are accumulated in the savings account, interest is earned. It is also to be known that unlike a regular checking account the number of withdrawals that can be made over a period, let’s say a month is limited to a minimum deposit period.
Another characteristic feature of savings account is that the guardian of the account needs to abide by regulations of the financial institution maintain a minimum average balance in the account. There is no set parameter for the balance that is to be kept; the number is hugely dependent on the kind of savings account selected by the customer. On failing to maintain this limit one might find themselves being charged a fee against the inability to maintain the minimum balance. In addition to all of the mentioned details, most of the financial bodies do not provide cheques relating to the savings account.
When different types of savings account are available corresponding each other regarding interest rate offered, the recent trends have seen an unfortunate and unexpected drop in interest rates. There was a time when 6% interest savings accounts were a standard. This rate of percentile had enabled a stable source of interest for individuals who were keeping their hard-earned money in the bank. In the recent years owing to regulation shifts initiated by banks, governing bodies have forced for rates to be dropped at levels negligible to the 6% interest savings accounts.
The only remaining few banking bodies who provide 6% interest savings accounts are credit unions who are detached from most of the regulations imposed on recognized banks.
Credit unions are institutions similar to banks which function in almost the same if not identical capacity. A credit union is an entity that allows its members to borrow from an accumulated sum of the amount stored with the union. Most of the time these bodies are considered to be not for profit in nature. The job that credit unions commit to is not all so different than what a categorical bank does. The mild difference lies in the kind of institution credit unions are.
These are a group of willing people who agree to have logical and trustworthy financial transaction keeping in mind the best of interest of all members. Credit unions are a reason 6% interest savings accounts exist. Attention is to be paid to the details wherein credit unions act as a group of individuals who agree to the terms and conditions of the union for 6% interest savings accounts. It’s only the members of the union who are allowed to utilize the facilities provided by the entity.
6% interest savings accounts enable any and all individuals to be assured that their carefully collected savings are kept at a place where it’s earning the best possible rate of interest, and simultaneously it attaches a sense of security and assurance to the people who decide to enroll their savings in this category of accounts.
