We live in an unpredictable world filled with uncertainty. Putting some money aside for a rainy day sounds like a logical thing to do. But the time where people hid their money in safes or kept it around the house is gone. In modern times, the money is kept at the bank. Actually, the extra money you have would be stored in a savings account specifically.
Whether you are saving to achieve a goal you have in mind or to be prepared in case of an emergency, opening a savings account should be the way to go. In addition to keeping your money safe, a savings account will help you earn money. How?! Well, you will earn interest on the money you have in the bank. Of course, the interest rate would differ depending on the account type and the terms. But at the end of the day, you’ll be making money despite the amount. If you look at things from a different angle, you are investing.
So yes, if you don’t have a savings account, you should consider opening one. In case you are already planning to open a savings account, here are some important questions you need to ask before you make the final decision:
What Is My Saving Goal?
Determining the goal you are saving for is crucial to decide what type of savings account you will choose. Saving for a house differs from saving to be prepared for unexpected situations, e.g., a medical emergency. Knowing your goal will help you define your needs, therefore pick what kind of terms will suit you when choosing an account.
Before opening a savings account, you need to know that some may restrict your access to the money. With some accounts, you won’t be able to use your money before a specific time.
If you are looking for a safe place to keep your money, stick to a regular savings account. It will grant you immediate access to your money, but keep in mind it won’t make you much of interest. If you don’t need access to the money at the current time and you want to save money to make a big purchase, choose an account with a higher interest rate.
What Are the Deposit Requirements?
A savings account comes with service fees, and some accounts will require you have a certain balance to open the account. The fees you will pay differ depending on the bank and the account you choose. So, take a look at all available options before you make the final decision.
What Are the Benefits?
There are some benefits you need to find in the savings account you’re about to open. These include ATM accessibility, the ability to transfer money from the savings account to other accounts you may own, online access to the account, and rewards.
Some banks will restrict the withdraws you make through an ATM per month and impose fees in case you exceeded that number. And it’s more convenient to be able to use online banking rather than visit the bank to make transactions.
As for rewards, many banks will grant their savings accounts owners a range of value-added services. As an owner, you will be able to benefit from offers and discounts from certain stores, cashback, and reward points that you can redeem for other things.
These are the most important questions you need to answer before deciding the type of account you want to open.