A safe and reliable way to grow your money
Savings accounts have benefits that make them a valuable part of any personal finance plan. So if you are thinking about opening a savings account, here are some of the advantages you can look forward to.
1. Access
One of the most useful benefits of a savings account is that your money is out of your checking account, where you may risk spending it on non-essentials, but still easily accessible in case you need it, such as for an emergency. Depending on your type of account and the size of your balance, there may be little to no fees for withdrawals, meaning your cash is there if you need it. Be sure to check the requirements for savings withdrawal fees so you understand the account when you set it up.
2. Guaranteed returns
Ever ask yourself, “What will my savings be worth?” With a savings account, your money will steadily grow according to your set interest rate. You can use an online savings calculator to predict from month to month what your balance will be, making it a stable place to grow your money for short term goals, such as a vacation, furniture or a new computer. Even if there is a dip in the markets, your savings are secure.
3. Worry free
With a savings account, you never need to worry about having access to your money since it is protected by the Federal Deposit Insurance Corporation, which guarantees your deposits up to $250,000.
4. Reduce or eliminate monthly fees
Most savings accounts require minimal service fees. By maintaining a minimum balance or setting up automatic deposits to the account, you can reduce or eliminate monthly service fees. That means the interest you’re promised is the return you get. Be sure to check monthly maintenance fees so you understand how to help avoid these fees when you set up your account.
5. Short-term or long-term
Savings accounts help you save for shorter-term goals. But they’re also a great place to park your money until it grows enough for larger investments. For example, some types of accounts charge substantial fees if you aren’t investing a large sum, or require an initial deposit of several thousand dollars. A savings account may be a stepping-stone to that investment, protecting and growing your money while you save for your next big goal.
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