Commercials and ads run rampant about checking accounts and why everyone should have one. Although it gets short shrift, having a savings account is also very important. While checking accounts are commonly accessed, savings accounts (like Current) are the essential money reserves that allow people to save money for emergencies and other important matters. However, there’s a lot more to a savings account than that. Here are more benefits of keeping money in a savings account and why you should open one as soon as possible.
Savings Accounts Bear Interest
One of the smartest aspects of a savings account is the interest-bearing bonus it can provide account holders. While not all savings accounts do this, it’s a solid reason to look for banks that offer these. Different banks offer different interest rates for savings accounts, based on various factors, such as customer volume and financial reserves. Shopping around for a competitive interest rate is a prudent practice for finding a savings account with a decent yield. Think about it. While your money is sitting pretty, it also starts to make money while interest accrues.
You Might Not Miss The Money
These days, savings accounts can be set up to deduct a percentage of funds from another account (such as checking). This convenient perk is helpful, particularly if you plan to follow the 10 percent rule. Consider a scenario of a weekly paycheck that nets $500 after taxes. Following the classic savings rule of putting 10 percent aside, as well as using an automatic deduction towards a savings account, $50 of every check would end up in savings. After a month, that savings account will house $200. As you never see it go towards savings, it’s harder to miss. Besides, the money still belongs to you. It’s just got a nice and cozy home in a savings account.
A Protective Umbrella for a Rainy Day
When savings build-up, it can provide account holders with a really nice financial cushion if a money emergency rears its head. On top of that, up to $250,000 that is held in a savings account is protected and insured by the federal government.
While some people may still be wary about using a savings account, based on your financial situation, it could be a prudent financial decision that would only benefit you. It’s a silent saver that can make effortless money and has government protection. That’s a pure win-win for those savvy enough to have a savings account.