Savings accounts are a great way to put aside money that isn’t supposed to be touched. Sure, you can do this with just a regular account, but what would be the point in that? A lot of people don’t really think about it, but the act of putting your money in a place where you know it’s not to be spent is a psychological action as well as a physical one. You are telling yourself that the money you pout away isn’t to be blown on frivolous things, and that definitely helps.
However, you shouldn’t just go out and get a savings account for the sake of getting a savings account. Before you jump on us, hear us out — it’s really all about making sure that you’re getting the best deal possible on your money. It’s about making sure that your money is actually going to be safe. It’s a matter of liking the institution that’s holding onto your money. When we go around and see banking guides that urge people to just get an account “before it’s too late”, we almost want to laugh. However, the idea of just pushing your money into anyone’s hands without asking questions is far from a laughing matter. You need to always make sure that you’re at least doing some due diligence. Banks do fail, and one only needs to look at the subprime meltdown and collapse in the US market in order to understand why we would be so cautious.
Not all banks are bad, not all banks are failing, and there are plenty of great banks out there that are happy to help people pursue a higher level of financial security. It’s those banks that deserve the spotlight, and those are the ones that you want to focus on.
When it comes to savings accounts, you will need to make sure that you are also looking at the fine print. For example, in the US you can only withdraw money from a savings account six times. Yes, you could technically withdraw more than that, but the trouble is that federal law disbars this without penalty. You could end up having your savings account reduced back down to a checking account where it might not generate interest. Even if it does generate interest, it’s not going to be the same level of interest that you previously enjoyed. That’s why it’s better to have a savings account as well as a checking account and not mix the two. The money in your savings account should be just for the savings account and only that.
Proper account maintenance means that your nest egg is definitely saved for the future, which is always a good thing. Why not check it out today for yourself — a savings account is a great start for the future that you’ve always wanted!