What Makes a Savings Account Ideal for First Time Earners?

Starting your first job or gig is an exciting milestone. With your first earnings or salary in hand, one of the biggest questions is: "Where should I keep my money?"

Many new earners either leave their earnings in a current account or withdraw it in cash—but there’s a better way to begin your financial journey: a savings account.

Opening a savings account is simple, safe to use, and helps your money grow without any effort. It’s the perfect starting point for anyone who’s just begun earning, especially if you're not ready to invest yet or want to build a habit of saving.

In this blog, we’ll explain why a savings account is ideal for first-time earners, what to look for when choosing one, and how it helps you build strong financial habits from day one.

What Is a Savings Account?

A savings account is a type of bank account that lets you safely store your money and earn interest on your account balance. It’s designed for people who want to save regularly and have access to their money when needed.

Here’s how it works:

• You deposit money into the account.
• The bank pays you interest (usually every quarter or month) on the money you keep there. Ujjivan Small Finance Bank offers high-interest savings accounts tailored to meet your financial goals and aspirations.
• You can withdraw or transfer the money whenever you need it—through ATMs, UPI, mobile apps, or online/Internet/mobile banking.

Most banks offer minimum balance savings accounts, which is a great relief for new earners who may not have a lot of savings at the beginning.

Savings accounts are also very safe. In India, deposits of up to ₹5 lakh per person per bank are insured by the DICGC (Deposit Insurance and Credit Guarantee Corporation), which means your money is protected even if the bank fails.

Why First-Time Earners Should Start with a Savings Account

Opening a savings account might seem like a small step, but it’s actually one of the smartest things you can do when you start earning. Here’s why:

a. Higher Interest Rates

With Ujjivan Small Finance Bank, you can enjoy higher interest rates up to 7.50% (as on 8 July 2025, *T&C apply) on your savings account balance. For more information on savings account interest rates, please click here.

b. Earn Rewards and Uplift Your Banking Experience

Yes, you heard that right. You can now enjoy rewards on transactions and/or payments if you have an account with Ujjivan SFB! To know more about the loyalty program, please click here. 

c. Easy Access and Full Control

You can withdraw or transfer money anytime—through mobile app, UPI, debit cards, or online/Internet banking. It gives you the best of both worlds - your money stays safe and you can use it whenever needed.

This makes savings accounts great for emergencies, paying rent or bills, etc. Also, you can set up auto debit with your account for monthly instalments or payments like OTT subscriptions. This helps you manage your payments and finances in a better way.

d. It’s Safe and Low-Risk

A savings account is one of the safest places to keep your money. Unlike cash, which can be lost or stolen, or investments, which can go up and down in value, a savings account keeps your money secure.

In India, the RBI-backed DICGC insures up to ₹5 lakh per depositor, per bank, so even if a bank shuts down, your money is protected.

e. Helps Build Good Financial Habits

A savings account helps you learn how to manage money: You can start setting aside a fixed amount every month (for example, 20% of your salary) for your goal or next big-ticket purchase. You can track your finances via smart bank statements. It encourages you to save first, spend later, which is one of the most powerful habits for long-term financial success.

What Features to Look for in a Savings Account

Not all savings accounts are the same. As a first-time earner, it’s important to choose one that fits your needs, doesn’t charge unnecessary fees, and helps your money grow.

Here are the most important features to look for:

a. High Interest Savings Account

Savings account interest rates can go up to 7.5% per year, depending on the bank and your balance. Go for banks like Ujjivan SFB that offer high-interest savings accounts.

b. Easy Mobile and Internet Banking

You’ll likely manage your money through your phone. Choose a bank that offers a user-friendly app, UPI access (for payments and transfers), easy account opening process, and  SMS/email alerts for transactions, among others.

c. ATM/Debit Card Access

Savings accounts come with a debit card. The cards offered may vary based on the account you have. For instance, a Privilege Savings Account comes with a RuPay Platinum Debit Card. Also, ensure to check daily/monthly withdrawal limits, charges for out-of-network ATMs, and annual card maintenance fees 

d. Reliable Customer Support

As a first-time account holder, you may need help with understanding fees and charges and other features of your savings account. Select a bank that offers a toll-free customer service number, chat/email support, nearby branches so you can visit and resolve your queries in a short span of time.

Tips for First-Time Earners to Maximize Savings

Here are a few simple ways to get the most out of it:

a. Set a Monthly Saving Goal

Use your savings account as a tool to achieve your goals or to build an emergency fund. Try to save at least 20% of your monthly income. Even if it’s a small amount like ₹1,000 or ₹2,000, consistency matters more than size.

b. Track Your Spending

Through smart statements/bank statements, you can track your expenses easily. This would help you plan your finances better.

c. Don’t Let Idle Money Sit Too Long

Once you’ve built up an emergency fund (typically 3–6 months’ worth of expenses), consider moving extra money to a Fixed Deposit (FD) for higher returns, Recurring Deposit (RD) if you're saving for a goal, etc.