Savings bank accounts are an excellent choice for saving your hard-earned money. You earn interest on your funds to beat inflation and grow your wealth. Additionally, you get easy access to funds, better interest rates, and numerous banking services at your fingertips.
While these services aid you to save money, you still need to define how to keep saving money when you open an online bank account. This article discusses how to save money in an online bank account and earn a better interest rate.
Here is how to save money in an online bank account
You can effectively save money in an online bank account by following the simple steps highlighted below:
1. Set a financial target
One of the best ways to save money is to set a time-bound goal. Pen down how much you aim to save monthly and how you plan on saving this amount. When setting a target, do note the surplus expenses that you incur monthly and try to minimize them.
For instance, IDFC FIRST Bank savings accounts have various features that help in financial planning. Using the e-statement feature, you can track your expenses and set up auto-payment to pay your regular bills on time.
2. Start a recurring deposit account
Recurring deposits are one of the best ways to grow your savings faster. You can open this account using your net banking account with a few clicks.
The concept of recurring deposits is straightforward. You need to fix an amount, which will be automatically deducted every month from your savings bank account. The auto debit in recurring deposits will continue for a predetermined period that may range between a few months and ten years.
Upon completion of the tenure, the overall invested amount and the interest accrued are transferred to your savings account. Once the amount is deposited into your savings account, you may either reinvest the fund by opting for the fixed deposit route or withdraw the amount to meet your financial goal.
3. Use the technology to your benefit
Conducting manual computations with your money may prove to be troublesome and tedious. You may even make manual mistakes. To avoid such errors, you may use the savings account interest calculator available online or on your banking app to budget your money. Such apps also provide you with insight into your monthly income and expenses. These apps also help you in saving funds based on your financial goals.
4. Invest
Investing is considered crucial for building a healthy corpus of funds. Consider distinct forms of investment options such as mutual funds or equities. If you are new to the market, you may take the help of financial advisors. An advisor can guide you better and help you prepare the correct investment strategy per your risk appetite, investment capacity, and financial goals.
With rising inflation, parking your funds without earning significant returns may not be enough post your retirement. Hence, it is vital to use your savings account to attain financial freedom.