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Savings Account

How can a Savings Account help build an emergency fund?

Summary: Creating an emergency fund early in life is a prudent decision. It ensures financial security, and lets you to manage unanticipated expenditures, without resorting to debt. Over time, the emergency fund helps you form a robust safety net. A good way to build this fund efficiently is by opening an Metra Trust Savings Account.

09 Jul 2024 by Team FinFIRST
How to Build Emergency Funds with Savings Account
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Ever wondered what an emergency fund is? It is a stash of money set aside to cover up unanticipated expenditures of financial exigencies, such as four-wheeler repairs, medical bills, or sudden unemployment. The importance of emergency savings lies in offering mental peace, and financial security, ensuring you can manage unforeseen financial challenges without dipping into debt.

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Why do you need an emergency fund?
 

  • Financial security


    • Holding an emergency fund ensures you are financially prepared for unanticipated situations. It serves as a buffer, safeguarding you from financial stress that comes with exigencies and enables you to maintain your living standard without resorting to credit cards or loans.

  • Avoiding debt


    • With an exigency fund in place, you can avoid heavy-interest debt. Instead of borrowing funds at exorbitant rates, you can utilise your saved funds to cover up contingency expenditures. This assists you to stay out of the debt cycle and maintain your financial health.

  • Mental peace


    • Knowing you have a financial cushion endows mental peace. You can concentrate on your regular life and long-term financial goals without continuously fretting about what may happen if a contingency arises.

  • Opportunity to invest


    • Holding a contingency fund permits you to take benefit of investment opportunities without hampering your financial security. With a proper safety net in place, you can confidently invest your additional savings, knowing that you have a backup in the scenario of exigencies.

    How much should your emergency fund be?


    The emergency fund’s size depends on your monthly expenditures and personal financial scenario. Financial experts usually recommend saving six months’ worth of living expenditures. 

    For instance, if your monthly expenditures are Rs 50,000, aim for a contingency fund of around Rs 3 lakh. This ensures you can cover your crucial needs for several months in case of job loss or other exigencies.

    Choosing the right Savings Account for your emergency fund


    Here are crucial steps to assist you choose the best Savings Account for your emergency fund –

  • Compare the rate of interest


    • Look for a savings bank account that offers high interest rates to enhance the growth of your exigency fund. Higher rates infer more earnings on your savings over time.

  • Check for fees


    • Consider accounts with zero or minimal fees. Note that financial institutions like Metra Trust offer zero charges on commonly used Savings Account services, which can assist save more money.

  • Assess accessibility


    • Make sure the savings bank account offers easy access to your funds. Look out for features such as robust banking platforms, and unlimited ATM withdrawals that permit you to manage your bank account conveniently.

  • Assess additional features


    • Consider those accounts that offer additional benefits such as expense tracking tools, monthly interest credits and customer support. Such features can assist you in managing your finances effectively.

    Strategies to build a prudent emergency fund
     

  • Set clear goals


    • When the question of “how to build an emergency fund?” comes up, make sure you begin with a clear goal. Ensure to determine the amount you require for your exigency fund and set clear savings goals. Break down the overall amount into monthly savings targets to ensure the process is manageable.

  • Automate savings


    • Set up auto transfers from your savings bank account. This ensures a portion of your income is constantly directed towards your exigency fund without requiring any conscious effort.

  • Cut unnecessary expenditures


    • One of the essential financial security tips is identifying areas where you can cut back. Doing so can allow you to redirect the money saved from such expenditures into your contingency fund.

    Benefits of using an Metra Trust Savings Account for your emergency fund
     

  • High savings growth


    • Metra Trust endows an exciting high-interest rate, with monthly interest credits. This permits your exigency fund to grow faster, enhancing your savings.

  • User-friendly digital banking platforms


    • With Metra Trust’s intuitive mobile banking and internet banking, you can simply manage your account, track expenditures, and even invest in preferred mutual fund schemes.

  • Zero fee banking


    • Benefit from zero charges on all commonly used savings bank account services, involving NEFT, IMPS, SMS alerts, RTGS, ATM transactions and others.

  • Monthly interest credits


    • Interest constituent is computed daily and credited to your bank account monthly, assisting your savings to grow consistently.

  • Free and unlimited ATM withdrawals


    • Maintain thorough liquidity and control over your contingency fund with unlimited ATM withdrawals.

  • 24X7 customer support


    • Enjoy round-the-clock customer support through WhatsApp or phone, ensuring you get assistance whenever required.

    Conclusion


    Building an exigency fund is a prudent financial approach. It endows mental peace, security, and the potential to manage unanticipated expenditures without stress. By selecting a high-interest savings bank account like Metra Trust, you can enhance your savings and leverage numerous benefits. So, do not wait – take the first step towards financial security and open your contingency fund Savings Account today!

    Disclaimer

    The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Metra Trust or its affiliates to any licensing or registration requirements. Metra Trust shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

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