Do you ever picture a haven for your paycheck where it not only enjoys a secure abode but also thrives? It’s not a financial fantasy but an attainable reality with the strategic use of savings accounts. Let’s dig deeper into these seemingly mundane financial tools and reveal the tremendous benefits they hold.
Savings accounts typically come with lower fees, making them an appealing option for the budget-conscious. However, there might be limitations on the number of free transactions per month or the types of transactions you can perform without incurring additional costs.
Checking accounts, on the other hand, usually have higher monthly fees but offer unlimited or more free transactions. However, it’s worth noting that checking accounts generally don’t yield interest on your balance.
Therefore, it’s not wise to let a lot of cash idle in your checking account. Not only are you missing out on potential interest earnings, but the high fees can also eat into your balance. So, when deciding between a savings and a checking account, consider your banking habits and the associated fees to maximise your financial benefits.
5 Key Benefits of Using a Savings Account for Your Salary
If you haven’t yet tapped into the power of a savings account, it’s time to start researching. Compare the offerings of various South African banks, evaluate the benefits, and select the one that suits your needs the best. Remember, your paycheck has growth potential – unlock it with a savings account, particularly in this high repo rate environment.
Savings accounts are offered by every financial banking institution across South Africa. Each savings account has unique benefits, however, the five below-mentioned benefits ring true across the board.
Hassle-Free Account Opening
Embarking on your savings journey is as straightforward as it gets. To open a savings account, you usually need:
● Your identity document
● Proof of address
● An initial deposit (this amount varies among banks, with some not demanding it upfront)
In this digital age, you are now able to open a savings account with some banks without even visiting a branch. Everything is digitised and created for you.
Easy Access and Flexibility
A savings account is tailored around transactions. You can withdraw, deposit and save your money in your account as you wish. Many banks do not charge for certain transactions such as free deposits up to a certain amount. Other banks have free ATM withdrawals or free swiping facilities attached to your account.
Benefit from High Repo Rates with Interest Earnings
A savings account incurs interest on the money that you leave in the account for a certain period. When the interest rate in the country goes up, so does the interest that you earn on the money in your savings accounts. It is important that you choose an account where your interest rate earned will increase over time as well. Some banks offer as much as a 10% annual return on savings.
Your Money is Safe
Gone are the days when carrying cash is the norm. The greatest money move that you can do for yourself is to have your money in a savings account with a trusted bank. Using your card to perform day-to-day transactions is far safer and wiser.
A Goal-Orientated Money Move
If you know what your interest rate is, you can work towards achieving your financial goals. You can also speak to a consultant at your chosen bank to see how much money you should keep in your account to accrue a certain amount of interest. Set those financial goals and use the power of the savings account to achieve financial freedom.
A savings account puts the financial power back into your pocket. If you do not have one, research the various banks in South Africa. Look at their offerings. Write these down in columns or set it up in a spreadsheet and compare the specific offerings to find the best savings account for your needs.