Although savings accounts may seem to be antiquated, people of all ages can derive a number of important benefits from using this financial vehicle to manage money. Savvy consumers will explore all options before choosing a bank to ensure that the services and perks are competitive.
Benefits of a Savings Account
1. Keeping money away from a checking account helps people avoid spending it. For many, money in a checking account is too accessible, making it easy to spend for non-essential items.
2. When fast access is needed, funds will be available. This accessibility can be important when a financial emergency occurs. Keeping an emergency fund in a savings account is a smart move.
3. Many banks offer these accounts with user-friendly features such as no-fee withdrawals with no minimum balance required. Some banks may waive fees for customers who keep high balances. Banks also tend to compete with each other, so comparing terms for various lenders often leads to more perks.
4. Although interest rates are usually low, a balance will grow over time. As the balance increases, the interest returned will also grow.
5. Virtually anyone can open a savings account with minimal time and effort. A visit to a local lender will require only moments to set up an account and make an initial deposit.
6. Investments can be complicated, often requiring extensive research to understand options. A savings account is simple, requiring little research aside from learning about interest rates and fees to compare services.
7. Depositing money into savings can be an effective way to start saving. Consumers may make an initial deposit to begin earning nominal returns while researching other investment options that fit needs and desires.
8. Getting started with investments is often the hardest step. Consumers that find the idea of investing daunting can move forward with a savings account without feeling overwhelmed.
Whether consumers need a simple way to begin saving or a conservative place to stash cash, it simply doesn’t make sense to wait to open an account. The benefits you’ll reap when you open an account are numerous and preparing for the future or rainy day is always a smart idea.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual.