Traditional passbook savings accounts have long been famous for individuals looking to save money. However, with interest rates hovering around 3%-5% per annum, it’s essential to consider better alternatives that offer higher returns and additional benefits.
Fortunately, several options like Zero Balance Savings Account Online provide the same convenience and features as traditional savings accounts while offering improved interest rates. Let’s explore some profitable alternatives to traditional savings accounts that can help you save and earn more interest.
Liquid Funds
Liquid funds, which are debt mutual funds, offer an excellent alternative for savings. These funds invest in short-term government debt instruments such as treasury bills and government securities, which pose lower risks. Some of the benefits of liquid funds include:
Higher returns with an attractive interest rate: Liquid funds provide the potential for higher returns compared to savings accounts.
More safety and liquidity: These funds offer enhanced security and better liquidity, making them ideal as a saving instrument. You can reinvest the funds in other financial instruments to maximise your savings.
By considering liquid funds, you can enjoy improved safety, liquidity, and potentially higher returns than traditional savings accounts.
Payment Banks: Convenience and Zero-Balance Accounts
Payment banks, such as the India Post Payments Bank, are relatively new entrants in the non-banking financial companies (NBFCs) category. An account in a payment bank functions as a zero-balance account by default. Investing in payment banks offers the following benefits:
No penalty for non-maintenance of balance: Unlike traditional savings accounts, an Online Zero Balance Savings Account does not impose penalties for non-maintenance of credit.
Vast distribution network and convenience: Payment banks have a widespread distribution network, ensuring easy accessibility for account holders. They offer facilities such as cash withdrawal from ATMs, chequebook requests, and mobile notification alerts.
Enhanced customer services: Payment banks often provide discounts and cashback offers to their customers, enhancing the overall banking experience.
Fixed Deposits
Fixed deposits (FDs) are an excellent option if your goal is to maximise your savings and create wealth. You can take a step towards wealth maximisation by parking your funds in fixed deposits. FDs offer higher interest rates than savings accounts and can be tailored to meet your needs. Some benefits of fixed deposits include:
Higher interest rates: FDs typically provide higher interest rates than savings accounts, making them attractive investments.
Flexibility and liquidity: You can choose different tenure options for your FDs, ranging from 12 months to 60 months, ensuring flexibility and liquidity. Additionally, FDs offer the flexibility of cumulative or non-cumulative interest payouts, allowing you to customise your investment strategy.
Additional benefits: Some FDs provide other benefits, such as a multi-deposit facility, online loans against fixed deposits, creating FDs using a debit card, and auto-renewal options. These features enhance the convenience and flexibility of managing your FD investments.
Fixed deposits can be a rewarding investment option, offering higher interest rates, flexibility, and additional benefits than traditional savings accounts.
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Gold
Gold has long been considered a stable and safe investment option, attracting investors in various market conditions. Investing in gold provides diversification and potential protection against inflation. There are different ways to invest in gold, including:
Physical gold: Buying physical gold, such as gold coins or bars, lets you own the precious metal directly. This allows you to sell or exchange the gold as per your needs.
Gold Exchange-Traded Funds (ETFs): Investing in gold ETFs allows you to own units. These units are traded on the stock exchange, providing liquidity and convenience.
Gold Mining Companies: Another option is to invest in shares of companies that mine gold. This allows you to participate in the potential appreciation of gold prices indirectly.
Gold is a stable investment option that can diversify your portfolio and act as a hedge against inflation.
Conclusion
While traditional savings accounts have been widespread, exploring alternative options can help you enhance your returns and enjoy additional benefits. Liquid funds offer safety, liquidity, and higher returns, while payment banks provide convenience with zero-balance accounts.
Fixed deposits offer higher interest rates, flexibility, and wealth maximisation opportunities, while gold provides stability and diversification. By considering these alternatives, you can effectively make your money work for you and achieve your financial goals.