Keeping money in your hand rather than in a bank may sound practical to manage your finances, but this habit may be a very risky move when money is prone to theft and loss from natural disasters. Nowadays, banks offer us the convenience to open up a savings account at a very low cost (if not for free), ensuring the safety of our money that we have hard-earned.
A savings account is a deposit account offered by banks where you can store, withdraw, and monitor funds with a modest interest rate. Opening up a savings account is relatively easy– and with only a little sum of money, you can already start one for personal or business use. Here are some notable advantages and benefits of opening up a savings account.
Open a savings account with little to no charges.
Almost anyone can easily open a savings account with a little amount, or sometimes, free of charge. Most banks also do not require a maintaining balance which can be a big burden to many people. Because of this trouble-free system, even students can already start their own savings account that will help improve their financial management skills.
Earn interest on your savings.
The interest rate of a simple savings account may not seem much, but a little is always better than nothing. Besides, keeping funds at a bank will mean more potential of earning than keeping it at home. Some people may think that storing money at a bank may also be risky considering that you will not have absolute control over your funds, yet it is apt to note that risk of loss is virtually non-existent because of the funds you keep with your savings account are insured. With this, you can secure your money all while making it grow.
Keep your money safe.
Ensure not only the safety of your money but also your own by entrusting your funds in a bank. Keeping a large sum of money at home can put you at risk of being a potential target for robbery. Aside from this, keeping money in the bank will also ensure it from the risk of destruction or loss from fire or other unanticipated natural disasters.
You can easily access your funds.
With a savings account, money is always readily available for you. Major Banks provide their account holders easy online access to their funds anytime and anywhere. With a mobile application, you can monitor your money and transfer funds, among others. Moreover, with access to a bank branch or an Automated Teller Machine (ATM), an account holder may withdraw funds for emergency expenses that we can’t avoid.
Savings account provides automated bill payments.
Make your financial life simpler with automatic bill payment that savings account can also offer. With automatic bill pay, you will never miss payments as it allows debiting recurring bills from your savings account scheduled on a predetermined due date. Another helpful benefit of automatic bill pay is that you can save time keeping track of due dates and making time to queue in line every week just to settle bills.
Develop a habit of saving.
Most banks also offer automatic saving schemes that help you save to avoid a financial crisis in the future. In this process, your savings account gets credited every time an employer gets you paid and with this, you can effortlessly and certainly save for your long-term goals in a short period.
Link your savings account with your checking account.
Some banks allow account holders to link their savings account with their checking account, in this way, holders can transfer money expediently when their balance is running low. This can be very useful in covering shortfalls.
You will have a very low risk of losing money.
Savings accounts don’t lose money, for these are safe from volatility, unlike most types of investments wherein you may lose a huge sum in a matter of months, weeks, or even days.
Open joint accounts with your partner.
Nowadays, people use joint accounts with their partners to save funds for various things—may it be for their dream house, dream wedding, or merely for future financial security.
No lock-in period.
Most banks offer savings accounts with no commitment or no locked-in period. Hence, you can switch accounts as often as you like.
With these and more, it is safe to say that opening a savings account can be a simple yet effective way to help you achieve your financial goals. Stashing money that you have saved under your mattress may seem fine, but with a savings account, you can secure your money more effectively and productively with an interest that bed mites can’t offer. However, it is also important that you consider every key point before you decide to open your own savings account or stick to your methods of saving money. Either way, the only thing that matters is its purpose.