At this age, almost everyone has a bank account. Not having a bank account is rather an anomaly in the current world. It is simply because having a bank account can be a great tool for managing your personal finances. The account statements from your bank can help you determine how and where you are spending your money. This can also help put you on track for a reasonable savings plan. To add icing on the cake, personal savings accounts often pay interest, which basically earns you free money. But is it worth opening for everyone? Let’s look at it from a neutral point of view.
The benefits are:
Earning from interest
You get to earn without doing anything. The savings account, depending on the interest rate can help you earn some money without actually doing anything.
Keeping a track of your spending
The transaction records help you to keep a track of where you spent all your money. You can plan your monthly or yearly expenditure from this. This can also greatly help you grow a habit of saving.
Most banks provide a form of a card, which can be used anywhere. This provides you with the option to go cash-free. This provides a more secure form of carrying your money, and it is essentially hassle-free.
Banks are more or less secure. Keeping money in your home or wallet is not safe most times, and the incidence of burglary or theft is quite common. The main reason why the banking industry grew is still a classical reason to have a bank account.
Personal finances typically are significantly easier with a bank account, but you might have your reasons for living life without one. It might be a temporary thing while you clear up identity theft issues or problems you’ve had with banks in the past. Maybe you just decided to do without banks altogether. Either way, it’s essential to know how to function bank-free if that is your choice.
These are the disadvantages of opening a bank account:
The Debit card fee at times is quite significant. At times the cardholder doesn’t have enough cash compared to the charges he has to pay for the debit card fee. There are other charges in the forms of GST charges, Cheque leaf fee, Minimum balance fee which a customer has to bear. The cost at times is not worth it if you don’t have enough money in the bank.
The security issue is another key drawback while opening a bank account. You share your identity, address, and your source of income to the bank. Although the chances are very slim, there were incidences of hacking, but the chances are like having a snowfall in a desert. Banks thus give quite a significant amount of importance to security nowadays. You also expose your unique details like your transaction and income details with the bank. You need to keep in mind and make an informed decision before opening a bank account.
The advantages and disadvantages point out that it is good to have a bank account in general. Whether or not you will have one depends on your choice, and as a smart person, you should make an informed choice.
Stay tuned to learn more about basic banking and financial system in coming articles.