Why you should have a Savings Account
Everyone should have a savings account, but you have probably heard this again and again because it is the truth. There is so much that a savings account can do for you and your family. For instance, you have money set aside for a rainy day. Then again, you could have a rainy month or a rainy year and you may need to live off of that money. If that money were not available, you could find yourself in a dire situation with no solution in sight.
What a savings account can do
When you deposit money into your savings account, it gathers interest. This interest can be as low as .01% and go as high as 4%. It really depends on the bank you are doing your banking with and what kind of account you take out. The base interest rate that is established for financial institutions all over the country may be .01%, but it is up to the financial institution to set it higher than that if they wish. They use their own discretion based on what they can afford to do.
So first let us look at your standard savings account. All you have to do is deposit money into this account when you can. You can have a few dollars in this account or you can have a few thousand. Either way, it is going to gain the interest rate that has been established for that account.
However, there are other types of accounts. For example, you may have an account that has anywhere from $1 to $4,999 in it. It may have a rate of .01% or it may have a rate of 2.59%. Again, it depends on the bank.
There are also pension accounts that can gain a good bit of interest. For example, you may have $41,000 or more in a pension savings account and gain upward of 4% interest. That is quite a bit of money you are going to see in your return and a great way to contribute to your retirement.
Finding the right account
When finding the right account, make sure you talk to several banks in the area. In other words, you are going to comparison shop, which is something that is very important when you want your money to grow at the fastest rate possible. Make sure you evaluate what the interest rates will be based on certain balances within your account. You can never spend too much time on comparing these accounts because having the right interest rate or the wrong interest rate could make a significant difference in how much money you are able to gain on your account.
So don’t say, “I think I might open up a savings account when I have the money.” You don’t need a lot of money to start an account. It does depend on the type of account, but your standard savings account is easy to open. Simply go to the bank of your choice, tell them what you want to do, and make your initial deposit. You’ll be very glad that you did.