There are a number of benefits of a savings account. Unlike a checking account, this money is not used for everyday expenses but is set aside for multiple reasons. Bank also reward those who have savings accounts at their financial institutions. But, there are many benefits to opening a savings account.
It is a safe way to accrue money instead of keeping large amounts of money in the home. In addition, money placed in banks is kept in fireproof safes.
A savings account is the best way to set aside a rainy day fund, money that may be needed if an emergency or unexpected expense arises.
People with children can set up a separate savings account for their children as soon as they are born. This account is not attached to their checking account and is a way for them to save money for their children's college tuition.
Money set aside in a savings account is insured by the federal government. Therefore, even if the bank folds, individuals don't lose their money.
Another benefit of a savings account is that the bank pays individual interest on money kept at its band. In a sense, the customer is being paid by the bank for giving it business.
Individuals who set up an automatic transfer from their checking to savings account easily pay money into this account. One of the benefits of an automatic transfer works the opposite way as well. If individuals come up short in their checking account, the difference can be taken from their savings account.
About High Yield Savings Accounts
It is true that even in times when interest rates are not at historically low levels, earning money from a savings account...
Advantages & Disadvantages of a Savings Account
Savings account are low-risk, simple to set up and highly liquid, but limited earning potential, transaction limits and fees are disadvantages.
Advantages & Disadvantages of Passbook Savings Account
Passbook savings accounts are basic savings accounts where all of your transactions are recorded in a ledger, or booklet. These accounts are...
What Are the Benefits and Risks of a Savings Account?
Saving money allows you to prepare for large purchases, like buying a home or paying for college, but it can also come...