5 Reasons Why You Should Have a Savings Account Today
We’ve all been told since we were young that part of being an adult and becoming independent is by opening a savings account.
As the most basic type of credit union account in existence today, these accounts enable you to deposit money, keep the funds safe, and withdraw the funds as needed. Typically paying interest on your deposits, savings accounts interest rates do remain relatively low on the lower-risk accounts today.
Since these types of bank accounts don’t present a high investment return, many people skip over their importance and jump right to the high-risk investment opportunities. The bottom line is that any financial plan rests on a foundation of cash or money in your checking account, and though your checking account handles your everyday expenses, it is financially wise to have a savings account backing it up.
Here are 5 essential reasons to consider your own savings account today:
Banks and lending institutions can fail. Though they don’t exactly share that information with you when you open a banking account, it is true nevertheless. Luckily, the Federal Deposit Insurance Corporation (FDIC), an independent agency created by Congress, insures up to $250,000 in bank savings accounts for each holder. If your bank fails, the FDIC will cover your deposit, keeping a large chunk of savings in your possession.
Unlike risky investments and frozen accounts that keep you locked out of the investment and unable to withdraw your funds, savings accounts are readily accessible. You are free to make withdrawals during all business hours, and can even access the account with a regular ATM card at any ATM location.
3. Wealth Accumulation:
Depending on where you are in life, you may not own real estate or stocks yet. One great and sustainable way to start accumulating wealth is through the interest earned on your savings account. As the money sits in the account, it will continue to accumulate interest while you leave it there.
4. Emergency Support:
We don’t want to think about the unexpected life events that could drain our bank accounts, like personal injury or sickness; but they still do happen every single day. In the case of accidents, sickness, or home debilitation, your savings account is there as an emergency fund, supplementing the money you need to make it out of that rough patch.
5. Capital Accumulation:
Some people aren’t exactly great when it comes to saving their money. That’s why it’s so important to take it out of your checking account and put it into your savings, where it remains hidden. You’ll be less tempted to dive into it, thereby accumulating capital over the years that you can use for bigger investment projects, like real estate development in the future.
Savings Equals Stability
Opening a savings account is one of the most beneficial financial choices you can make today. To really get ahead of your savings, your bank will have an automated savings tool that removes a portion of your checking account and puts it into your savings each month.
Invest in the stability of your future.