Banking & Finance

Savings Account – Meaning And How It Works

Are you at crossroads about opening an account in any bank? Do you wish to learn more about what a savings account is all about? Well do read on, I will share with you, the pros and cons of owning this type of bank account.

Savings account

Savings Account Meaning And Features?

According to Wikipedia, a savings account is a type of bank account where you can make deposits which will, in turn, pay you an interest. It allows you set aside your funds and earn a monetary return for doing so.

Read also: The Difference Between Savings And Current Account

Key Features of a Savings Bank Account.

1. Interest rates. Owing this type of bank account enables you to receive interest as you save more and more of your funds in it.

2. Bonus Incentives. A lot of savings accounts also give you access to gain bonuses depending on the amount of money you can deposit into it during a given period of time.

3. Minimum Opening Deposit. You are required to make minimum deposit account before you can activate your savings account. These costs usually cover setting up and maintaining the accounts. This amount of money defers from bank to bank as well as the type of savings account.

4 Monthly Deposit Requirements. You are equally required to make deposits minimum monthly basis to maintain the interest rate on your account. if you fail to meet this, your interest rate might be lowered.

5. Linked Accounts. You can link your savings account to other accounts and make transactions to and fro with ease.

Anyone can open a savings account as long as there will be periodic deposits to the account else the account becomes dormant. Even kids have a special bank account in present times.

Benefits of Owning A Savings Account?

  • A savings account pays you interest
  • It facilitates savings
  • It also makes it very easy for you to access your funds’
  • Savings accounts are a secure way to save your money

Read more: how to open a Us bank account for non-residents

Limitations of owning a savings account

  • You have a limited amount of transactions permitted on your accounts daily
  • There is a limit on the amount of money you can withdraw
  • Your account may attract certain charges monthly such as maintenance charges, account statement charged etc.
  • You must set aside a minimum balance to enable that your account remains open

Types of Savings Accounts in Nigeria

Savings account

Apart from the normal accounts as run by the different banks in Nigeria. Some banks also offer specific savings accounts to various classes of people. Some of these accounts include:

  • Student (Teens)
  • Kids &
  • Corporate

Read more: How to open a domiciliary account in Nigeria

How to open a Savings Account in Nigeria

  1. Get the necessary documents: these documents vary from bank to bank. Visit this page for more on the documents needed.
  2. Minimum opening fee: You are required to activate the account with a minimum opening balance.

You can now open a bank account online from the comfort of your home. This service varies from bank to bank but ensures the need to follow the traditional banking patterns is minimized.

Owing a Savings account can be a good way to start putting away funds for future investments. I do hope this article gives you a clearer view of the purpose of owning one.

If you need more instructions, kindly drop a comment below, do not fail to share with your friends!!

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Chidera is an experienced freelance blogger and social media enthusiast. Click here to see all my posts

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