Write any three/five advantages of bank account.

OR

Explain two advantages of opening a bank account.

The main advantages of opening a bank account are as follows:

1. Safety of Money — Keeping cash at home involves the risk of theft, loss or fire. The savings deposited in a bank account remain safe and free from such risks, as banks have strong security arrangements.

2. Payment Facility — Payments can be made easily and safely by means of cheques, drafts, NEFT/RTGS, UPI, etc. There is no need to keep large amounts of cash at home or count notes when paying. Cheques and UPI also serve as evidence of payment in case of disputes.

3. Collection Facility — The bank collects cheques, drafts and bills of exchange deposited by the account holder. Businessmen having bank accounts can also get their bills of exchange discounted easily.

4. Habit of Savings — Bank accounts promote the habit of thrift and saving in the public. People are encouraged to save and deposit money because of the benefits of safety and earning interest.

5. Loans and Advances — Account holders can obtain various forms of credit from banks — loans, overdrafts and cash credits — for personal, business or emergency needs.

6. Safe Custody of Valuables — Banks offer lockers (safe deposit vaults) to their account holders on preferential basis. Customers can deposit their jewellery, important documents and other valuables for safe custody.

7. Credit Information — Banks provide information relating to the creditworthiness of their customers. A bank account holder can get better credit facilities in business, and banks issue letters of credit for those engaged in foreign trade.

8. Other Services — Account holders can avail of various other services such as purchase and sale of securities, payment of insurance premium, collection of interest and rent, remittance facility and travellers' cheques.