Benefits of Having a Savings Account
A savings account can be another way towards financial independence. It allows individuals to deposit money in a secure account, offers easy access, and is simple to open.
A savings account will add a percentage of interest on deposits and grow your money even more. Read on for more benefits of opening a savings account.
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Get Started on a Savings Goal Today
No matter your financial goals, it’s always a good idea to have at least one savings account. To open a savings account, you don’t need to be steadily employed or have a large deposit, making this account a must, no matter your age or financial situation. Credit unions may only require as little as $5 to open an account. If opening an account for a minor, the account will be a joint account with the parent or guardian. Once the child comes of age, the account will be under their control.
Access Your Money When You Need It
Most savings accounts opened at a bank or credit union are easily accessible. A few accounts, such as money market and high-yield savings (HYS), have deposit and withdraw limits. However, a basic savings account will allow you access to funds at any time. This type of savings account is a great place to hold your emergency fund. The general recommendation for an emergency account is to have three to six months’ worth of living expenses readily available at all times.
Funds Are Safe and Secure
The money in your savings account is insured and protected by the National Credit Union Administration (NCUA) for federally chartered credit unions, the National Credit Union Share Insurance Fund (NCUSIF), and the Federal Deposit Insurance Corporation (FDIC) for banks. Each agency insures deposits up to $250,000.
Saving Becomes Automatic
Open a savings account and start an automatic savings plan. You’ll need a checking account to schedule regular transfers from checking into savings. Once it’s set up, building a nest egg or rainy-day fund through automatic saving becomes painless.
Earn Interest on Savings Deposits
Even a basic savings account will earn interest on your deposits. Most basic savings accounts earn around 1% interest. If you want higher interest rates, look to a money market or HYS accounts. Remember that a money market or HYS accounts usually have balance requirements, possible fees, and other considerations. Credit unions may have better interest rates than banks.
Savings Accounts with No Limits
Regular savings accounts come with no limits on the number of deposits or withdrawals. As long as you have the funds in the account, you can make a withdrawal. Money market and HYS accounts have limits on withdrawals and deposits. These accounts typically allow no more than six withdrawals or deposits per month. Check with your financial representative for more information.
Further Resources on the Benefits of Having a Savings Account
Here are some additional resources on the benefits of having a savings account:
- Bankrate: In this article, "10 types of savings accounts: Where to save your money", the different types of savings accounts are explained, and the benefits of each type of savings account to meet your financial goals.
- Credit Karma: Offers an article about five benefits of a savings account in order to help set yourself up for financial freedom.
- Dollar Geek: This article explains what a savings account is and the benefits of having a savings account.
Open a Saving Account Today
A savings account can put you on the path to your financial goals. Great for emergency funds, kids and teens, and anyone looking to keep their money safe, savings accounts are a solid step towards financial freedom. Visit a credit union today for more financial products, excellent rates, and the best in personalized service.
