What is Bank Savings? Definition of Bank Savings, Bank Savings Meaning and Concept
Bank savings are all those financial resources, from personal savings, which are deposited, in some form, in financial and credit institutions.
Bank savings are, in general, all monetary resources deposited, in any of their forms, in a bank. In this sense, any product contracted, in its various forms, between an individual and the bank, and that involves a transfer of savings resources, would be considered bank savings.
How is bank saving developed?
People and organizations often go to banks to save and make their money profitable. This is because, in addition to being a secure way, it is the main way through which payment transactions are carried out. That is, both expenses (receipts) and income (salaries).
However, there are also other forms of non-bank savings. Saving money at home or in non-bank savings products are examples of non-bank savings. For example, in Spain, having an individualized systematic savings plan (PIAS), which an insurer may offer, is also an example of non-bank savings.
Savers who deposit their savings in banks are protected by a public body that supports up to a limit amount. In the case of the euro area. If a bank fails, or does not have sufficient liquidity to meet the demand for withdrawal of funds, there is an agency that covers up to 100,000 euros. This body, called the Deposit Guarantee Fund, supports said amount by account and holder in the aforementioned cases.
Types of bank savings products
Among the main channels of bank savings, the following should be highlighted:
- Checking accounts or savings account at sight : These are usually accounts with free mobility of resources and immediate availability. In this, the individual can make current income and receive regular payments. It is a highly liquid product with little or no interest.
- Savings accounts: They are similar to the previous ones, with the difference that in these accounts you cannot carry out transactions like the previous ones. These are used to deposit surpluses and that capital that is going to be used for savings, which is why they are usually better paid.
- Deposit or installment account: These are fixed-term deposits that usually have low availability. That is, less liquidity but, in return, they obtain higher profitability. This is derived from giving up the money without making use of it for a while.