You work hard every day to earn money and save for a bright future. So, it makes sense for you to keep as much of it as possible. However, despite your best intentions, you may unknowingly be making mistakes that cost you thousands of rupees each year. Whether it is paying high fees, missing out on valuable savings opportunities, or not using savings account tools, these common pitfalls can add up quickly and leave you struggling to make ends meet.
To help you maximise your savings and get more control over your finances, here are some common savings account mistakes and tips to avoid them.
- Overlooking the features of your savings account
Many savings accounts come with benefits like free cheque books, doorstep facilities, high withdrawal limits, cashback rewards, and more. Choose an account that aligns with your objectives and offer valuable features. For example, if you make frequent withdrawals, opt for an account that has a higher withdrawal limit to avoid transaction fees.
Also, there are different types of savings accounts exclusive to specific audiences, such as women, kids, senior citizens, etc. With each one, you get different saving account interest rates, features, facilities, minimum account balance requirements, maintenance fees and penalties. So, always research and compare your options to find the right account to manage your funds.
- Using one account for all expenses
Do you pay your mobile bills, water bills, and even your EMIs from one savings account? Many individuals make this same mistake.
This approach makes it difficult to track your expenses, understand where your money is going, and save money strategically. Also, it puts your main savings account at risk as all your transactions are taking place from one account. Suppose you lose your debit card or it gets stolen, you are risking all the funds in that savings account.
To avoid this, it is advisable to set up separate accounts for savings, investments, and daily expenses.
- Keeping all funds in one account
When an emergency occurs, using a savings account to pay for those expenses seems an easy solution. But this can leave you with little savings for your long-term goals and create financial instability if another emergency comes up. So, it is important to build an emergency fund. You can open a bank account online and keep funds to deal with urgent medical bills, car repairs, or job loss. It may take some time and discipline to create an emergency fund, but it helps you keep your savings intact and grow over time.
- Poor account maintenance
Check your savings account balance and statements from time to time to ensure accuracy and prevent any fraudulent activities.
Today, banks offer mobile banking apps with useful features to help you maintain your account. These features include the ability to check your savings account interest rates online, monitor account activity, transaction history, bank account statements, and fixed deposit details. Such features help to track your spending habits and identify areas where you can reduce expenses and save more.
To wrap up
These are a few mistakes that you, as a savings account holder, must avoid. Other mistakes to avoid include not setting a realistic savings goal, failing to automate savings, not budgeting correctly, and withdrawing funds excessively.
Most importantly, use online tools such assaving account calculator to make informed decisions with your savings. It helps you calculate how much interest you would earn on the total savings account balance and interest rate being offered by your bank. This way, you can compare different banks along with their interest rates and get more control over your finances.
