We have all be eager to see the budget and how it would impact our budget. With the new financial decisions doled out by the finance minister stating the impact of certain investments, there have been several questions raised over its tax implications. In today’s world arguably, the question whether to save or not does not arise as there are several who still believe in parking in their funds in liquid assets. Given the recent inclusion of taxes on certain types of funds and considering the volatility of the market, having a savings account with a good interest rate is not all that bad. We discuss the various implications of having a savings bank account.
Savings are leading the way
From most quarters, experts have vouched that parking your funds in a savings account seems wiser than ever, it inevitably means that most people who are interested in saving their money in funds need to relook their investment outlook. The sudden change in investment advice has not been all that recent, as the volatility in the markets over the past few years have clearly deterred investors from the stock market. The rise and fall in the SENSEX and the NIFTY have been a constant cause for concern amongst investors. Here’s a reason why a savings account should be considered post-budget 2014-15:
The budget 2014-15, although the most awaited with the assertion of the new government, yet that means the inclusion of several taxation norms that have discouraged investors from looking at larger profit margins from debt instruments. So, we look at the various ways in which the savings account is likely to get a significant boost from investors, here’s why:
- Buffering from Market volatility: When the concerns regarding market volatility have been raised over time, having the steady and safe place to park your money seems like a more logical decision. Despite robust predictions by stock market experts, there is no saying how steady the flow of profit margins will remain over the long term. Hence, the decision to go ahead with a savings account will ensure certain returns in the long term.
- Tax-free returns guaranteed: Although, the savings account interest rate may not match up to the high level of profits that you may gain in the stock market, they are undoubtedly steady. They offer tax-free interest rate for up to Rs. 10,000.
- A steady rate of interest: When compared to certain bad spells in the stock market, it’s quite possible to enjoy the returns from your savings account. It is the most guaranteed mode of getting benefits over time, preventing you from periodic loss that you may occur in the stock market.
- Long term returns guaranteed: A savings accounts gives you the ability to multi-task, enjoy the benefits of capturing the high interest rates in fixed and recurring deposits, PPFs, national savings scheme etc. You have complete freedom apart from investing in the stock market, to link your bank account with several long term savings schemes that will generate fixed returns.
The question to open a savings account does not occur to most working professionals as they are provided a salary savings account by default. Yet, it’s always beneficial to have a savings account that generates a significant level of steady income with a fixed interest rate over time.