Articles relating to investments are a plenty these days, but what do you do with your entry point into the world of finance -- your savings account? Are you among the vast majority who use it as a place for stashing their salary? Or are you among the smart few, who make every rupee count?
If you are not in the latter category, then it's time you keep the advanced gyan on mutual funds and ULIPs aside for some time and focus on getting the basics right... and it can't get more basic than your savings bank account.
Here are some pointers. They're simple, yet they are rarely followed.
Keep some cash handy
As a standard practice, keep three months of expenses as cash in your saving account. Anything above that, you must either invest (so you and your dependents can enjoy tomorrow) or use (so you enjoy today).
To start with, fall in love with your savings account. This will at least ensure you visit it every few days, if not daily. These days, it's not so difficult to know what is happening in your account.
Life begins with your ATM
It starts with your ATM. Most cash withdrawals are done via the ATM nowadays.
However, instead of taking the receipt for the transaction, would it not be better to take a mini statement? That way you would be in a position to track past transactions as well as save paper (in case you take the mini statement after taking a printout for the last transaction).
Also, the mini statement deserves a longer life span. It would be better placed in your file at home rather than torn and thrown into the dustbin right beside the ATM.
Next is your bank statement
You get it quarterly if you have an account with a private bank. With government-owned banks, you get the passbook. See to it that the passbook is always updated, which is again not a big hassle these days.
As for the bank statements, go through the details minutely if possible. If not, at least look at the big entries. These will tell you the amount and the date on which you withdrew or deposited cash in your account. Check the figures with your ATM mini statements.
These exercises may sound time consuming, even useless as long as things go well. In case something goes wrong with even a single entry in your account (let's say you ask for two accounts to be linked to a single ATM card, and find they have been linked to somebody else's card -- trust me it happens!), it is these very habits that will save you some trouble.
It's like insurance. You buy life insurance hoping nothing goes wrong. But you still have to have insurance; if something does go wrong, you have something for your dependents.
Make entries in your chequebook
Another operational hassle can be filling details at the back of the chequebook.
It might sound like a trivial thing to do. Since you are the only one who issues cheques from your cheque book, you may choose to ignore this exercise. However, it is always better to keep a record of whom a particular cheque was issued to, for what reason, on what date and for what amount.
In case your bank provides you net banking facility, do opt for it. This way, you can monitor your account at your own convenience.
Not maintaining a minimum balance can surprise you
You should always keep an eye on the amount you have in your saving account. You should know that not maintaining average quarterly balance could give you a nice little financial shock. Most banks charge you a penalty if you don't keep a certain minimum balance with your bank.
Does this scare you? Take heart. You can always use the sweeper facility that most banks offer you.
This is how it works. The bank asks you to keep an extra amount of over Rs 5,000 that goes into a fixed deposit account and generates higher returns for you. If and when the balance in your savings account goes below a certain minimum prescribed by the bank, this amount from your fixed deposit is again swept back into your savings account.
Check your bank's website regularly
Go through all the links on the website. Know what features are available; do not necessarily avail of all of them, but at least keep them in mind.
Finally, in case of any discrepancy, call the bank immediately. Be armed with your records and demand immediate action. Escalate the matter to the branch manager; send mails to the grievance mail id, create a scene if need be. Don't forget -- it's your money. Don't be ashamed to make yourself heard in a bank.
The author runs a Nagpur-based finance advisory, Money Bee Investments. He can be reached at moneybee.finplan@gmail.com
