ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -This can help you earn a higher rate of return as the average bank return rate on funds stored in a standard savings account is anywhere between 2.75 % to 3.30 %; while the interest rate offered on FDs is usually anywhere between 2.80% to 5.25%.

Detailed explanation-2: -Currently, the national average savings account interest rate is 0.22%, according to Bankrate.com. But that’s an average. Different institutions offer their own interest rates, with rates that start at 0.01%.

Detailed explanation-3: -But unlike most checking accounts, you can also earn a small amount of interest each month, and if used the right way, a savings account can help you curb impulsive, unnecessary spending and meet your long-term goals. Savings accounts are offered at most banks.

Detailed explanation-4: -In savings accounts, interest can be compounded, either daily, monthly, or quarterly, and you earn interest on the interest earned up to that point. The more frequently interest is added to your balance, the faster your savings will grow.

Detailed explanation-5: -Banks use the money deposited on savings accounts to lend to borrowers, who pay interest on their loans. After paying for various costs, the banks pay money on savings deposits to attract new savers and keep the ones they have.