What are the benefits of depositing money in Bank?

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The benefits of depositing money in Bank are mentioned here in this article. Our lives have evolved from merely using paper notes and metal coins to QR codes and instant payments. All of this has changed due to digitization and increased popularity of banks.

Banks are the organizations that allow citizens to store money and further use this money to provide loans to people seeking for capital. Banks thrive on the principle of interest. They provide bank account owners with varied interest rates according to their account types. Also, they take interest from those who have borrowed money from banks, the rest is all subtraction, multiplication and addition.

There are various kinds bank accounts that exist. However, the following four categories sum up most of the types. These are savings, current, recurring deposit and fixed deposit. All of these vary on the basis of tenure, transactions and purpose. Merely as a just, if you are a business owner and have frequent transactions to make, then ‘current account’ is the type for you. If you’re looking forward to saving money why still being allowed to make transactions, then ‘savings account’ is the option for you. Recurring deposits as well as fixed deposits follow a longer tenure in which transactions other than deposits are not allowed. 

“Okay, I have a bank account. But, I don’t understand how can giving my money to some organization called a ‘bank’ can benefit me in any way?” Here’s the answer for that.

10 Benefits of depositing in the Bank

The benefits of depositing money in the bank are listed below:

1. Robbery aka Theft

When you don’t have those hundreds of rupee notes lying in your house, the chances of getting robbed are reduced. Even if you do get robbed, you will experience less damage as most of your assets are lying in the bank. You also have bank accounts for safekeeping gold and other metals. Not only that, you can also place your important documents in safes provided by banks. The banks have proper safes and heavy security to keep your assets secure. If you’re traveling and are worried about purse snatching and such incidents, then you are safe if all your transactions are done digitally.

2. Interest

While you leave a thousand rupees in your cupboard at home and come back to take it after a month, you will find the same thousand rupee note that you left, no more, no less. However if you place the same money in a bank account you are sure to get an interest back with it. Over time if you leave a huge amount in the bank you are sure to get back more than you deposited. This is also known as passive income. You don’t do the work, instead you money works for you. In this way, the money which was previously lying idle is now helping you reap benefits. You can always invest and reinvest the money that you make in this manner.

Click Here: Which bank give the highest interest rate on savings account ?

3. Resist temptation

If you know that a two hundred rupee note is lying in your pocket, you’ll be tempted to spend it. Even when you know that you shouldn’t be spending on that item or it’s of no use to you. The fact that you have money makes you spend it regardless. Rather, bank accounts help you resist temptation as money isn’t in your hands. You know how much money is going out and how much your balance is. This realization helps you cut down on your useless spending.

4. Savings

Easy access to cash can always lead to easy spending. When you store a certain amount in a secure place and remind yourself not to use it, even then at times you go there and take it out. Banks help prevent that, with fixed deposits and other types you are not given the option of withdrawal until the fixed time period is over. Not only that, while that money is out of your reach you are also gaining more money on top of it. With opening accounts for longer terms you can also help secure your old age. Life is uncertain but the thought that you still have some assets lying somewhere safely help you live life more comfortably. No matter the reason, whether it is for marriage, higher education, your own house or even your old age, you can save money for each of them without worrying about spending or losing them somewhere. 

5. Easy transactions

Online banking and applications have made money transfer very easy. You no longer need to count the notes and coins for change. It takes merely seconds to send money from one place to the other. Standing in lines to pay your bills are slowly becoming ancient procedures. Many applications such as Paytm, Google Pay, Pay Pal, etc tie our bank accounts with them and further help us send, receive and much more. There is more transpiracy than ever before, we know how much we’re paying for tax, internet handling charges, etc.

You don’t have to go to the bus office to book your ticket or to the railway station anymore. You can do that sitting in the comfort of your bed. This is only possible because you don’t need to go give liquid cash because all of that work will be done by your bank instead. You also get cashbacks when you buy or transfer money online which makes it even better.

Click Here: Which bank offers the lowest interest rate on personal loan?

6. Natural Hazards

Captain America and the avengers come to the rescue, if we were in a Marvel’s movie that would’ve been possible. Dreaming of heroes coming to the rescue won’t help. This does not happen in our daily lives, if there’s a fire either it’s put out or it vanquishes everything. If you have cash lying in the house while it continues to burn, you’re likely to loose all the assets you own. It is always better to store them in a place where you get insured and assured for your money. 

7. Environmental friendly

Now when the Earth is facing a climate crisis. Going cashless and using digital forums help us reduce the use of paper and plastic among others. Instead of getting paper bill you can get an online receipt. We may thing that how is one small bill going to affect the environment. But it is this thought, which combined with millions of other people that makes the difference. Small changes go a small way, digitising our daily transactions can help us in reducing our carbon footprint.

Read also: Which bank has the lowest car loan interest rate?

8. Records of expenditure

You may loose that bill for the dress you’ve brought or forget how much money you’ve spent on small things. Sometimes we don’t even have a record of certain things we buy such as fruits from those street vendors. All of this leads to chaos when one sits own to total how many money they’ve spent. However, if all of your transactions and payments are made through your bank, then you have records for each and every one of them. You merely need to go online or update your passbook and you are good to go.

9. Build a credit score

With everything becoming easy from transportation to cooking, even borrowing money or getting loans have become incredibly easy. You can get a loan approved in minutes instead of hours. This can become possible only if you have a good credit score. That can only be possible if you have a bank account. Along with that you must be responsible with the money you withdraw and deposit in the account. It can also help you build up your credit score if you maintain your minimum limits. If you have a bad record of repaying money which you previously borrowed then the likelihood of getting another loan might be slim.

Read Also: What are the advantages and disadvantages of having a credit card?

10. Identity

It gives you a way to be identified with at government organisations. When ever you go to apply for your passport they ask for your bank information as well. Having a bank account not only helps you keep track of your income but also keeps everything white as far as the government is concerned. It even helps in your tax returns as you don’t need to carry all those receipts and bills while to show your expenditure. Now opening a new bank account takes only fractions of sections. Not only that, you don’t need to deposit a lump-sum amount to open a new account. You can open a 0- deposit account as well. You have different banks offering different interests rates. If you’re looking for all that and more, banking is truly a blessing and additional comfort we get to enjoy. So instead of hearing “Give me a ten rupee change please.”, just say “Sir let me send you the exact amount through Paytm or Pay Pal , which one do you prefer?”

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