Advantages of having a savings account
While savings accounts aren't typically known for their high interest rates, they do offer numerous advantages over other savings options. Consider these savings account advantages before putting your money in a CD or other investments.
Keeping your money liquidSavings accounts and money market accounts allow you to withdraw your money at any time, which is rarely an option with CDs or long-term investment options. Savings accounts allow for unlimited withdrawals by teller, mail or ATM, but federal regulations limit you to six telephone, electronic or preauthorized transfers per month. Keep in mind, only three of these withdrawals can be by draft, check or debit card. Nevertheless, you can access the money in your savings account when you need it most.
Get started with minimal cashIf you don't have a lot of money to invest, you can begin your saving habits using a savings account. Savings accounts usually require a minimum amount to get started, sometimes $1 to $25, but get the details before you put your money in. Many institutions require significantly more money in savings accounts, and will charge a considerable monthly fee if you don't maintain that balance. Simply ask or read the details before opening your savings account.
FDIC or NCUSIF insuredYour money is extremely safe in a savings account or money market account, making it a great location for secure saving. Depending on if your money is in a bank or credit union, the Federal Deposit Insurance Corporation, or FDIC, or the National Credit Union Share Insurance Fund, or NCUSIF, will insure your savings account money up to $250,000.
High-yield savings optionsSome savings accounts offer higher interest rates than others. These high-yield options listed on Bankrate.com are ideal for long-term saving, such as emergency funds. Most of these high-yield savings accounts are strictly online, which decreases the bank's overhead, allowing for these higher interest rates. If you are willing to do all of your banking online, you may see substantial returns on your money compared to a local branch.
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