A savings account is a safe place to hold your money. It’s meant to help you build your money for the future.
What is a Savings Account?
A savings account is a typical account at a bank or a credit union that allows an individual to deposit, secure, or withdraw money when the need arises. A savings account usually pays some interest on deposits, although the rate is quite low.
As of 2019, an average account pays slightly below 1% annually. There are savings accounts that offer higher rates, which allow customers to increase their savings more quickly while keeping money in a safe place.
Why Open a Savings Account?
In general, it is advisable to own a savings account. Opening one is free, and most banks and credit unions allow customers to register and transact online.
1. Offers safety
A savings account is the safest place to save money. Rather than carrying a lot of cash around or hiding it at home, the money can be kept in the bank. Cash on hand or at home can get lost very easily. It is possible for cash to disappear from the house or be burnt by a fire. However, when it is kept at the bank, the federal government insures it so that it can be recovered if something terrible happens.
2. Helps achieve personal finance goals
Cash in hand makes it very easy for an individual to spend on things not budgeted for. A savings account helps people set some money aside so that they can achieve their financial goals.
Also, banks help customers function well in their day-to-day activities. An individual can get by without a bank account; however, owning one helps one avoid impulse buying.
In addition, we make it easy for our customers to reach their funds. So, once an individual feels the need to access funds, all he needs to do is go to the bank and make a withdrawal or transfer funds from the savings account to a checking account. While there are restrictions on funds transfers, an unlimited number of cash withdrawals can be made through a cash dispenser or over the counter.