Why is it essential to have a bank account today!

Having a bank account is fundamental for your goals of financial independence and stability, no matter what stage of life you are in - student, working professional, homemaker, businessperson, student or senior citizen. Here's how having a bank account can benefit you:

Easy withdrawal and deposit of funds

It’s not practical to pay with cash everywhere, especially for larger purchases. Instead, having a bank account means that you will have access to all your funds anytime you need it, because of services like ATMs at every street corner, and banking apps and website available on your smartphone. Even if you prefer to pay by cash, you will be able to withdraw it when you need it, and not just carry your money around.

Avail government subsidies

Having a bank account could help you gain access to funds under different government schemes faster than ever. With the Direct Benefit Transfer (DBT) mechanism, funds from these schemes will be directly credited into your account, provided you have linked your Adhaar or PAN card to them. Some schemes you could avail with this benefit include the Aam Aadmi Bima Yojana, Pradhan Mantri Awas Yojana and the Pradhan Mantri Jan Dhan Yojana.

Keep track of money

Cash transactions are hard to keep track of – you often end up wondering where you spent the money and it’s very difficult to stick to a budget. However, making purchases through your bank account means that you will always have a record of the transaction and can always pull it up when you need to, through your bank passbook, SMSes from your bank, or a virtual passbook through your bank app. This will help you detect patterns in spending so you can choose to spend less on certain categories of expenses. Read on to understand if you need to have multiple bank accounts to manage your finances.

Pay bills smoothly

The fastest way to automate your transactions is through your bank account- whether you’re paying your electricity bill, buying groceries or paying off an EMI for your car. All you need to do is set up a standing instruction to transfer funds out of your account to pay your bills at the beginning of every month- this will not only help you pay them on time, it will also help you avoid the last-minute scramble of having to make time to go to the electricity office or mobile store, and you can also avoid borrowing from friends or family if you run out of money at the end of the month.

Safe way to store your money

Storing money at home is not practical- it’s not possible to store more than a certain amount and there is always the risk of it getting stolen or damaged. When you store your money in a bank, your money is safe, because even if the bank is robbed, most of your savings will be insured. A bank account is not just useful for saving money, you can also store other valuables such as jewellery or important documents by storing them in a bank locker, which is only possible if you have a bank account.

Get loans/insurance easier

Getting a loan depends on a credit score, which depends on your spending habits and is connected to your bank account. If you already have a credit card and have been making regular payments on it, your bank is more likely to see you as a responsible individual and offer you a vehicle or home loan. It could also help you avail further discounts or get a better interest rate and help you save money. Even if you don’t have a credit history, some banks could offer loans based on your account transactions. Similarly, insurance companies also look at your account transactions before issuing a policy, especially in the case of term life insurance.

Helps you grow your money

Most banks offer interest when you deposit money in a savings account. It is usually between 4-6%, but you can also choose to invest it in other investment options, both within the same bank (such as a fixed deposit or recurring deposit) or otherwise (such as investing in mutual funds). Having a bank account makes it easier for you to transfer funds to your choice of investment whenever you need it.

Having a bank account is not just a matter of convenience- it also helps you get a host of discounts. Choosing the right debit or credit card will ensure that you save in the form of reward points or cashback whenever you shop. It’s also important that you pick the right type of bank account for your needs.