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The initial step in a financial journey generally starts with opening a savings bank account in any bank but the main purpose of a savings account is to deposit money at a safe place and it also creates a relationship with the bank, which gives the investor/individual access to different investment avenues for them.
Following are the ways to gain more benefits from your savings bank account:-
1. Making investments
The savings bank account can be used to set up systematic transactions. A SIP or a bank RD can be set up for a particular date of the month for a certain period. A 3-in-1 investment, trading and Demat account can be opened by the savings bank account holder to make investments in securities. Investment in PPF, FD (using the sweep-in facility), insurance and other investment products can also be done through Internet banking.
2. Setting up bill payments
The savings bank account works as a person’s own cash management system. Third-party utility bill payments, tax payments, loan EMIs, the insurance premium can be paid seamlessly. Many Internet banking portals provide a quick snapshot or financial dashboard of the customer for all investments mapped to the bank account.
3. Tax compliance
The savings bank account records the income earned by the individual, as well as expenses carried out. It is easy to trace how assets have been funded from a matching income. The annual bank statement provides a record of the income earned (by way of salary/gift/dividends/interest/rent/profit etc) and hence becomes a key document for income tax compliance.
4. Leveraging relationship
The banking relationship can be leveraged to avail other benefits offered by the bank, depending on the size of the account. Credit cards, pre-approved loans, overdraft facilities, discounts on certain purchases, waiver of service charges, invites to special events are few of them.
5. UPI payments
The bank account can be linked to payment applications like BHIM, Google pays or Paytm to make payments easier and convenient.
To establish a strong banking relationship, one should not maintain more than two accounts.
Source- Economics Times