1. It encourages the savings habit
For most people having money means spending it. The moment they earn some money they think they are under some kind of obligation to buy something with that hard earned cash. They do not think much about the future or saving for a rainy day. Opening a savings account will instil some monetary discipline in the account holder and they will be able to resist the temptation to spend all that money away.
2. Earning interest on money that can also be withdrawn easily.
Many banks especially private sector ones give decent interest rates on the savings account. For the customer it works as a form of investment to have a savings account. Plus the fact that the account is flexible enough to allow the customer to withdraw the amount whenever he wants to works as a double benefit for the account holder.
3. Allows the account holder to make payments
Banks offer many more benefits on a customer’s savings account these days. The customer can make payments to different charities, railway and airlines bookings and online shopping sites. He can transfer money to another account and make arrangements to have loan instalments automatically debited from his account.
Banks have made the process of opening an account very easy. It is not even necessary for customers to have somebody introduce them for opening the accounts of many banks. It is the ideal product for allowing banks to mobilise resources and for customers to save money.