savings

4 factors in opening a savings account

Why you still need a savings account
Why you still need a savings account © Jakub Krechowicz/Shutterstock.com

According to a new study from the Consumer Federation of America, nearly half of all American families have a traditional savings account with a median balance of $2,400. A little more than one-third of families with low to moderate income have a savings account, with a median balance of $800.

"Much research has shown that families frequently are faced with unexpected expenses, ranging from a car repair to a medical bill to a traffic violation," says CFA Executive Director Stephen Brobeck. "Using a savings account is the easiest and least expensive way for many families, particularly those with few financial resources, to cover these expenses. Relying on a credit card, payday loan, or even friends or families are usually much less desirable options."

Here are four questions to ask before opening a savings account.

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