Savings Account for Students: Start Your Financial Journey

October 16, 2024

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Student life is often bittersweet. It’s replete with endless intellectual explorations, late-night study sessions, and that undeniable dream to make it big. But then there's also that immediate realisation to attain financial independence, especially when asking money from parents to pursue interests feels uneasy. It's easy to say 'start saving', but for many, it's difficult to practice in real life. One may ask - how to start? Well, opening a Digital Savings Account could be a steppingstone towards a stress-free financial life.

In this guide, we will explore the how Savings Accounts can benefit students, why saving is an absolute imperative, and more. Please note that, all the examples and tips given in this blog are based on students who are PAN and Aadhar cardholders, and falls under 18 years - 22 years age bracket.

Financial Independence Starts from Student Life

Start saving early to shape a stress-free financial future. But where and how to start? Let's decode some of the best saving practices.

1. Open a Savings Account

Probably, the first step in everyone's financial journey starts with a Savings Account. In simple words, a Savings Account helps in instilling discipline in a student's financial life. The more you make savings a habit, the better it is for your financial future. Students can also consider such accounts a repository to meet short-term goals, like paying off hostel rent, tuition fee, etc. Additionally, your account balance earns interest

Pro-tip: Opening a Zero Balance Savings Account can be a good starting point. Such accounts don't come with any minimum balance maintenance criteria. Consider Small Finance Banks for Savings Accounts because of higher interest rates.

2. Live on a Budget

Create a budget and try to stick to it. Use an excel sheet to list down monthly expenses and track the spends on a regular basis. You can bifurcate your expenses into needs vs wants. For better clarity - 'need' is something you require to survive and 'want' is something you desire but can live without. As a student, try to keep your 'wants' to bare minimum.

3. Consistency is the Key

Make saving a habit. Try to regularly save a portion of any money received, including allowances, part-time job earnings, or gifts. Even small amounts add up over time and contribute to financial security and future goals.

4. Monitor Transaction Activity

Review account statements to ensure transactions are accurate and track progress towards goals. Monitoring activity can help students stay aware of their financial situation and make adjustments if necessary.

5. Create an Income Stream

Having a part-time job or working as a freelancer or tutor could help you bring in extra income to cover your additional expenses. Today, there are plenty of freelancing opportunities. Paid internships can also help.

6. Save on Essentials

Dining out or ordering in can be expensive. As a student, you can mitigate such expenses by cooking your own meals. Also, try to resist impulse purchases. Try not to buy things you don't need, especially on a whim.

Now, let's find out how Savings Account can help students build a financially secure life.

Savings Account for Students: Key Benefits

1. Higher Interest Rates

You can earn interest on your Savings Account balance. Though many speculate that the rates are low, but in reality, such is not the case. There are high-interest Savings Accounts that can help students build corpus over time.

2. Open an Account without Visiting Bank Branch

Students are pressed for time - classes, internships, doing daily chores - their days are packed with multiple activities. Thanks to Digital Savings Accounts, anyone can now open an account from the comfort of their home and manage their finances from anywhere. Digital Accounts facilitate a 100% paperless journey without the need of any paperwork.

3. Debit Card Benefits

Once you open a Savings Account, you will be given a Debit Card. Such cards often come with benefits including offers and discounts on purchases made at select merchants, insurance coverage, etc. Students can effectively use their Debit Cards to avail discounts and save more on their transactions.

4. Safe and Secure

Savings Accounts keep your money safe and readily accessible. For instance, with Digital Savings Accounts, you can withdraw or deposit money from anywhere. Also, it's a much better alternative to keeping cash at home. Your money earns interest and grows over time. Also, it reduces the risk of loss or theft.

Final Thoughts

Follow the best financial practices and start your financial journey early in your life. Read books and blogs on finance to have a better understanding on how to build wealth over time.

Before we head to our next blog on banking and finance, did you know Ujjivan SFB offers a wide range of Savings Account products that are designed to help you build a better financial life? Browse through our offerings and kick-start your financial journey with Ujjivan SFB.

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FAQs

1. What documents do I need to open a Savings Account for students?

Typically, you would need proof of identity (such as Aadhaar card or PAN card) and proof of address (such as a utility bill or rental agreement). However, requirements may vary between banks. For instance, you only need your PAN and Aadhar to open a Digital Savings Account with Ujjivan SFB (your phone number should be linked to Aadhar and you would need to complete your Video KYC to open the account).

2. How can students create a budget to manage their finances effectively?

Students can start by tracking their income and expenses, categorising them into essentials (needs) and non-essentials (wants). Using free apps or spreadsheets can help maintain and monitor their budget.

3. As a student, do I have to maintain a minimum balance in my Savings Account?

IT entirely depends on the type of account. For Basic Savings Account, there's no minimum balance maintenance criteria.

4. Can a 15-year-old student open a Savings Account in India?

In India, anyone below 18 years is considered a minor. Understanding the importance of early savings, banks have introduced Minor Savings Account - a savings account designed for children between the age group of 1 day to 18 years.

5. How do I open a Minor Savings Account? What are the steps involved?

Minor Savings Accounts are for children in the age group of 1 day to 18 years. It can be opened and operated jointly with a parent/guardian till the child attains 18 years. Once the child becomes an adult (18 years), the account can be converted to a regular Savings Account. Till then, the guardian/parent can operate the account. You can open a Minor Savings Account for your child with Ujjivan SFB.

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