By definition, a saving account is a type of account that allows your bank to hold a deposit in your account for a specific period of time. These accounts are associated with modest interest rates. It means that you will be earning a certain amount of interest rate from your deposit. Here are the top benefits of having a savings account.
The greatest benefit of having a savings account is that it earns interest on deposited funds. With a savings bank account, you’ll earn an interest that’s often calculated by multiplying an interest rate with the total amount of money deposited. And the good news is that the interest rate keeps changing from time to time. For instance, in mid-2018, the Federal Reserve raised its benchmark interest rate due to the rising economic activity as well as improvement in the labor market.
Plays a Key Role in Solving Your Purpose
A savings account separates your deposits from the rest of your money, including cash in hand and long-term investments. Making frequent deposits and seeing it grow will definitely motivate you to save. It’s an incredible vehicle to help you save for a specific purpose, like new furniture, a vacation, or even a wedding. If you want to save for multiple goals, simplify your recordkeeping by opening multiple accounts.
Easy To Access Your Money
In case of an emergency, you can easily access the money deposited in your savings account. You can simply withdraw funds deposited to cater for unforeseen expenses. Most banks plus institutions provide their customers with online access to their finances 24 hours a day. Even more, certain institutions allow their clients to link their savings accounts to other accounts for quick as well as the hassle-free transfer of funds. Having access to your funds whenever you need is one of the greatest benefits of a savings account.
Keeps Money Safe
A savings account keeps your money safe. The Federal Deposit Insurance Corporation, for instance, insures banks while the National Credit Union Share Insurance offers maximum protection to credit unions. And this ensures that all your money remains in safe hands.
A savings account is perhaps one of the safest ways to invest your money. There are absolutely no risks involved. Even more, a savings account allows the facility to put your finances into another investment whenever there’s an opportunity. For instance, if a property in your locality becomes available and you’re interested in purchasing it for rental purposes, you can utilize your savings account funds to pay your down payment.
Another benefit that comes with a savings account is liquidity. Withdrawing funds from a savings account are simple and straightforward. You can easily access your deposited money whenever there’s a need. You can withdraw your money as frequently as you like using a bank teller, an ATM, or online banking. However, it’s important to note that government regulations allow you a maximum of six electronic transfers per month.
Having a savings account comes with numerous benefits. The above are the benefits of operating a savings account. Save with instabank and enjoy these benefits.