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Savings bank, we tell you how it works and how many types there are

Have you ever thought about saving your money in a savings account but you don’t know how they work? This is a good option for workers who want to start saving their money, so we tell you how they work.

The first thing you should know is that savings banks are a fund that is made up of a person’s contributions, one of the benefits of being in it is accessing loans with an interest rate lower than that offered by banks, in addition that it gives you profit for the resources you have.

We tell you how savings banks work. Photo: Pixabay

In general, there are two types of savings bank: labor and private, we tell you what each one consists of.

1. Labor savings bank

This is offered by the work centers to their employees, it is considered an additional benefit, it can also be called a savings fund. The way it works is simple: a part of your salary is deducted from your biweekly or monthly salary.

This amount will be combined with the savings of the other workers in order to create a fund, which can be used to grant personal loans but with a lower interest rate.

Being in a labor savings bank has tax benefits since the Income Tax (ISR) will not be deducted for the charges that come from this concept.

2. Private savings bank

They are their own legal entities and do not need to be part of a company that is an intermediary. If in your case you want to access them, you must do so through the Savings and Loan Cooperative Societies (Socap), which have the purpose of carrying out savings and loans operations.

Private savings banks have some benefits, such as providing competitive rates and returns.

Advantages of private savings banks The yields they offer are above inflation. Income and income generated by savings are exempt from paying taxes. They are regulated by the Banking and Securities Commission (CNBV), which could give you greater security. They have a Deposit Insurance from the Protection Fund. It can have daily, monthly, quarterly or annual maturities, so you decide how long you want your money to stay there. Disadvantages of private savings banks

In Mexico there are more than 800 savings banks, but not all of them are registered and authorized by the National Banking and Securities Commission, therefore, you must be careful where you leave your money to avoid being a victim of fraud.

Improving personal finances will always be a good decision and saving is a step to achieve it, if this is one of your purposes to start the year, savings banks are a safe resource to save your money without risking losing it.

For more information on this and other topics, visit our Savings section.