Savings Account

Definition

A savings account is a bank account where individuals deposit money to create savings for the future. Their capital keeps earning an interest. The purpose is to keep capital safe and liquid for short-term goals or emergencies.

Case Study

Vijay wants to save ₹1,00,000 for a vacation in one year. He opens a savings account that offers an interest rate of 3% per year. After a year he withdraws the amount. The money was kept safe and liquid, and Vijay also earned ₹3,000 as interest.The first true savings accounts emerged in Europe during the 18th century. By the late 1700s, European financial institutions began offering savings accounts to encourage savings.

Historical Reference

The first true savings accounts emerged in Europe during the 18th century. By the late 1700s, European financial institutions began offering savings accounts to encourage savings.