Saving money at the bank curbs your spending habits and allows your funds to grow over time. If you don’t have a bank account, you can’t take advantage of these magic machines that spit money out when you need it the most. Theft, fire, and natural disasters are some of the ways you could lose it all. 5 Advantages of an Ordinary Savings Account It won't earn a high return, but a savings account can be a safe way to store money. Think of it as the foundation upon which your financial house is built. Advantages of saving money in a SACCO instead of Banks in Kenya. You just have to be sure to read all the requirements to make sure you can earn the bonus and won’t be charged a monthly fee. Howbeit, remember, saving doesn’t mean cutting down your needed expenses dreadfully. This means the full potential of your money isn’t always realized, especially when compared to other investment opportunities. You can find pros and cons, but there are no just commandments of banking. Saving money should almost always come before investing money. Helps in emergencies: Emergencies are always unexpected. There are withdrawal limits on a savings account. Remember the scene from It’s A Wonderful Life where there’s a run on the bank? If you're tired of shelling money to pay fees at the ATM or for your savings account, then you might be on the hunt for a new bank. Advantages of Banks Safety of Public Wealth. They do not necessarily reflect the opinions of National Bank or its subsidiaries. ADVERTISEMENTS: 1. This led to … Check cashers are usually readily available since they often operate late at night and on … Sponsors of . When you open a savings account at a financial institution in the... 3. Many savings accounts offer easy access to your account with multiple bank … Should the bank fail, the depositor's money is secure. Interest. Another bank that we use. Emergencies of all sorts happen. Consider each key point and you’ll be able to determine if starting a savings account or continuing to maintain the one you have is the right decision for you. 2. Money saved in a bank is generally insured up to $100,000. October 27, 2015 January 19, 2016. Saving money should almost always come before investing money. Because if you don’t have a bank account, you’re missing out. Maybe you found the deal of a lifetime on something you’ve always wanted. If there was a fire in your home or some other natural disaster, you could lose your cash as well. There are no set 7 advantages. by Melanie Wright | Independent Money Mentor. When you open a savings account at a financial institution in the US, look for it to say that it is insured by the FDIC or NCUA. Have a read of Thrifty Two for tips on saving your money then read some of the benefits as described below: 1. Your email address is always safe with us! We always think that money in the bank will help us out during harsh times in life. List of Advantages of Savings Accounts 1. Keeping money at home makes it readily available whenever you want to use the cash. Your funds are still readily available. The chief advantages of having a Saving Bank Account are 01) It enables to save money.02) It develops the habit of Saving.03) It enables us to deal less in physical cash. Perhaps the foremost advantage of having a bank account is safety. Mobile banking: Online banks rely heavily on mobile banking apps for your smartphone and tablet. For one thing, it is user-friendly. In fact, money was invented by the society to overcome these drawbacks. Savings accounts are one of the most liquid investments. A bank account is one of the safest places you can invest your cash. Savings accounts also require low investment amounts to start with, depending on the type of account. 5. Many financial institutions allow bills to be paid automatically out of a savings account without being subjected to the withdrawal and transfer laws. Not necessarily. For most checking accounts not only do you not earn interest on your money, but the bank also charges you service fees every month. Learn more about why you want an account. Saving money is a skill that will be useful at all points in a person's life, since those people who master this are generally better prepared for financial calamities and are more equipped to make big purchases. Advantage: Bank Accounts are Insured. Have a read of Thrifty Two for tips on saving your money then read some of the benefits as described below: 1. ADVERTISEMENTS: 1. There are several savings account advantages and disadvantages. Over 70% of people in emerging markets do not have a formal bank account (Goss, Mas, Radcliffe, & Stark, 2011). 6 Benefits of Saving Money in a Bank You Don’t Want to Miss 6 Benefits of Saving Money in a Bank. In India, saving account can be opened by depositing र100 (approx. Saving money with the banks is simple and convenient because you can withdraw money when you need it. They totally converted me to online banking. Plus, no need to clutter up your home keeping years worth of statements, receipts, and cancelled checks. If you have extra money lying around after you get your bills paid, what do you do with it? Advantages and Disadvantages of Savings and Checking Accounts. According to the CBS News website, the Federal Reserve indicated that about 8.7 percent of American families did not have a bank account as of 2009. 4. Not only does storing cash on your property make you a target for a potential robbery, but losses like that are not always covered by a homeowner’s or renter’s insurance policy. These are all things that are made possible (or easier) by a having bank account. Rather, avoid such costs which are not really important like reducing the number of dine-outs or movies theatre visits, and always keep the importance of saving money in mind. If the bank was to fail, your money would be safe. The reason is simple. Helps in emergencies: Emergencies are always unexpected. You might be saving for a short-term goal, such as an emergency fund. Many savings accounts can be started for just $25. Despite exclusion from what we consider formal banking, many people in emerging markets have figured out their own ways to save money. Interest is often compounded monthly, or even annually, by most financial institutions. Many times you’ll find a better rate at a credit union than a national bank. 6. Why walk away from free money? Join the #brightsaver 30 Day Money Saving Challenge. Find out how our family of 8 keeps a good stockpile of food on a budget. Savings accounts will usually accrue interest over time. Tax refunds. We’ve opened a few bank accounts to get a nice bonus. Savings accounts can provide automated bill payments. Storing your money in a bank is by far the easiest way to save. Virgin Money view. Accumulate money for short term purposes. Savings accounts in the United States are insured. An important milestone of young adulthood is opening the first checking and savings … Whatever circumstance you face, one of the benefits of saving money in a bank is that you can grab money when you need it. Most people keep a certain goal in life when saving money. Be sure to shop … It's an easy way to save money Many banks offer an interest rate when you put your money in a savings account. Once you get past the setup, plugging in the numbers and clicking send makes bill paying day easier than ever. If you store all your money under your mattress, you’re at risk of losing it. But if you look, you can still find banks that pay you interest. The interest which is given on saving accounts is sometime attractive, but often nominal. With high interest rates, low fees and a propensity for digital technology, online banks are successfully competing with traditional brick-and-mortar banks, forcing the big banks  like Wells Fargo and Bank of America  to go mobile. It makes saving easier if you have a clear goal or purpose for the money that you are saving. Getting a piggy bank for kids is an excellent way to teach children about the value of money and the importance of savings. It actually helps save a huge proportion of public wealth that used to get spoiled in storage. Designed by Elegant Themes | Powered by WordPress. 4. Award-winning freelance financial journalist. Think of a savings account as a small insurance policy that can help you maintain your current standard of living if something unfortunate occurs. If this is important to you, saving in a bank would be a better option than investing in the stock market. 3. The reason is simple. However, with firm determination, it is not a difficult habit to adopt. You can also open an account at an online bank. You can save from just £1 which will help you to build up a pot of savings for when you really need it. Money kept in a non-interest earning bank account or in a home safe is missing out on valuable earning potential. A savings account is a popular banking product that allows for the safe storage of cash when it’s not being used. Having cash on hand at home is also a good idea. Generally, all banks and credit unions are federally insured by either the FDIC or NCUA for at least $250,000. by Jamie Jeffers | Saving Money | 5 comments. Insurance on a savings account is nice, but it does have a cap on it. 1. Another reason to open a bank account, beyond the interest, is that many banks these days are offering bonuses to open an account. Let’s talk about a few of them. Money kept in a non-interest earning bank account or in a home safe is missing out on valuable earning potential. When they have extra cash, many people opt to carry it around in their wallet, place it in a... 3. It’s true that most accounts pay very little interest these days. Rather, avoid such costs which are not really important like reducing the number of dine-outs or movies theatre visits, and always keep the importance of saving money in mind. It’s also good to keep your money in different places. The saving account holder is allowed to withdraw money from the account as and when required. 1. Howbeit, remember, saving doesn’t mean cutting down your needed expenses dreadfully. Three disadvantages of savings accounts are minimum balance requirements, lower interest rates than other accounts/investments, and federal limits on saving withdrawal. Even though through atm card money is made avaliable at any time, some people argued that it is not always the case. You can open an account with very little money. Two decades ago, there were few banks in the country, those which existed only operated from major towns only. Or if your water heater goes out, you could tap into your savings to purchase a new one. Managing a savings account enables you to take advantage of possible profitable monetary opportunities. Pros of Traditional Banks. Is this money management tool right for your financial needs? Right now they are offering .95% APY on savings accounts. 18 Major Advantages and Disadvantages of the Payback Period, 20 Advantages and Disadvantages of Leasing a Car, 19 Advantages and Disadvantages of Debt Financing, 24 Key Advantages and Disadvantages of a C Corporation, 16 Biggest Advantages and Disadvantages of Mediation, 18 Advantages and Disadvantages of a Gated Community, 17 Big Advantages and Disadvantages of Focus Groups, 17 Key Advantages and Disadvantages of Corporate Bonds, 19 Major Advantages and Disadvantages of Annuities, 17 Biggest Advantages and Disadvantages of Advertising. Keep your money safe.. Although interest rates have been extremely low since 2007,... 2. Check with your local credit unions to see how much interest they pay on savings accounts. US $2) to र5000 (approx. 7. The maximum amount of money that can be insured is $100,000. While saving at home eliminates the possibility of earning interest, it can offer certain advantages for … If you don't have a bank account, you're missing all the benefits of saving money in a bank. When you become a member of the Medium Sized Family community, you’ll learn how to pay off debt and become a confident saver… even when it feels impossible. Think of it as the foundation upon which your financial house is built. Your money is stored safely in a bank account. Saving money in a bank account does have its downfalls. If something bad happens to the money in one spot, at least you have more waiting somewhere else. 6. Advantages of savings accounts include the ability to withdraw at any time, unlike other long-term investments such as certificates of deposits. Your money is readily available. The sooner you start the better. Higher interest rates Another advantage of saving money in a bank account is that it offers you the opportunity to invest in accounts that pay high interest rates on deposits. They stored this cash in lockers, underground, with the grains, etc. They stored this cash in lockers, underground, with the grains, etc. Savings accounts earn interest. All you need to have is a data connection or access to the internet. Start with a little. Views expressed in this article are those of the person being interviewed. One of the biggest advantages of a savings account is that deposited funds accrue interest over time. Sponsors of . Savings accounts earn interest. Your money is kept safe. US $100). Saving money at home helps you avoid complicated bank procedures and unexpected fees arising from overdrafts or falling below the required minimum account balance. Two decades ago, there were few banks in the country, those which existed only operated from major towns only. Here Are the Advantages of a Savings Account 1. Other advantages inclu… In fact, I should probably keep more on hand at home in case of an emergency. In India, saving account can be opened by depositing र100 (approx. We have read drawbacks of barter system which make exchange process burdensome and highly inefficient. By contrast, up to $250,000 placed in a bank account is automatically insured against loss by the federal government. Whether you’re filing taxes or trying to remember whether you paid a bill, having a record of your payments is a good thing. If this is important to you, saving in a bank would be a better option than investing in the stock market. Unless you inherit a large amount of wealth, it is your savings that will provide you with the capital to feed your investments. Checks. Over 2,100 like minded people are already subscribers. Saving money with the banks is simple and convenient because you can withdraw money when you need it. Right now they are offering .20% APY on savings accounts. There were so many instances when the money got stolen, eaten by the rats or simply rot through the years. I prefer to keep the bank as a middle man between me and the bill charging companies. If you put $10,000 into the stock market, it could be worth $11,000 or $9,500 a week later. One common option to consider is a savings account. But in some cases, you may not need any money … Your neighbor might try to start that alpaca farm a year from now. US $100). Your money is readily available. It’s good to have income coming from... FDIC Insurance. With so many options out there, it’s important to weigh the pros and cons before choosing. Much like checking accounts, many saving accounts are also insured by the FDIC. Investing money can be risky, but it offers higher returns than bank savings accounts and can help people build wealth over the long-term. If your savings account is a money market account, then many institutions may require you to have a minimum of $2,500 in it at any given time. Saving money has both physical and psychological benefits, so start saving now. Or maybe your car broke down and you need to pay the tow truck. One of the biggest advantages of a savings account is that deposited funds accrue interest over time. Learn about the advantages and disadvantages of banks so you can decide what kind of financial institution is best for your money. For smaller children, a piggy bank can be a good way to teach about coins and bills in terms of how much each is worth. If you do have more than $250,000 in net worth, however, you’ll need to be conscious of where you put your cash to save it so that the account will be fully covered. By examining the advantages and disadvantages of a savings account, you’ll be able to make the appropriate decision for your financial health. I’ve used this bank in the past and we had no problems with them. Getting a piggy bank for kids can start them on this road to financial prudence. And even at home, I’d recommend keeping cash in different forms. If that's the case, don't forget to consider credit unions. If you don’t have a bank account, you’re missing out on several benefits. Give you easy access to your money.. Since banks are certified from FDIC we can trust over them that they will keep our money safe. Everyone’s financial situation is different, which means their savings goals are different, too. In India, every individual has a savings account. You receive security. Diversification is all the rage in finance. by venas October 27, 2015 January 19, 2016. For one thing, it is user-friendly. But when there is a dispute, it’s nice to be able to produce proof that you made that payment. Three advantages of savings accounts are the potential to earn interest, it’s easy to open and access, and FDIC insurance and security. Medium Sized Family is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com. The advantages and disadvantages of a savings account involve cash access, long-term capitalization, and safety. The chief advantages of having a Saving Bank Account are 01) It enables to save money.02) It develops the habit of Saving.03) It enables us to deal less in physical cash. Great point! Keeping the month in the bank retains the dollar value, but not purchasing power as of right now. There is a number of advantages to depositing money in banks banks are regulated safe places to put your money ( so much better than under your mattress!) The chief advantages of having a Saving Bank Account are 01) It enables to save money.02) It develops the habit of Saving.03) It enables us to deal less in physical cash. Money has overcome drawbacks of barter system. Saving money is advantageous because it provides people the opportunity to earn interest while keeping their money safe. Safety of Money. It makes saving easier if you have a clear goal or purpose for the money that you are saving. Diversification is all the rage in finance. 5. #FridayFrivolity. Keeping your cash in a savings account keeps you and your money safer. You can easily transfer money from one account to another with regularity, but in the United States, there are Federal limits on the number and the types of withdrawals you can make per statement cycle. This gives you an opportunity to begin saving your money, even if you don’t have much to save at the start. 6 Benefits of Saving Money in a Bank You Don't Want to Miss. And with so many things available online, you can easily access those records from anywhere. Take note: The rate you earn depends on the terms of your account agreement and where you open it. This also allows you to quickly transfer funds from one account to another, even outside of regular banking hours. Easy access to money means more temptations to spend it. Banks are undeniably one of the most trusted financial institutions in our country and we don’t think twice before depositing our money in a bank. Advantages 1. Another advantage of saving money in a bank account is that it offers you the opportunity to invest in accounts that pay high interest rates on deposits. Many Singaporeans can benefit greatly from the habit of saving if they choose to do it faithfully. You can opt for a loan in case you need urgent money in case of any emergency. See: Best National Banks of 2020. 3. Most banks offer multiple types of savings accounts that can keep your money safe while paying interest to help you reach your goals sooner. The saving account holder is allowed to withdraw money from the account as and when required. I keep money in the bank, some in a checking account and some in a savings account. It’s good to have income coming from several different places, because you never know when one source of income will suddenly stop. This allows you to save time because you don’t need to manually pay every bill each month and you’re less likely to experience late fees because you missed or forgot a payment. You may be required to carry a minimum amount. A savings account is a long-term, fundamental money management tool that can help you meet numerous financial needs. Here are some major ones to consider: Save for Your Future. A bank account is one of the safest places you can invest your cash. Unlike in the past, where people saved their money underneath their mattresses, using a bank to save money has safety benefits. However, with firm determination, it is not a difficult habit to adopt. Advantages: Liquidity. 2. The Bank cannot be held liable for the content of external websites or any damages caused by their use. The process for opening a savings account can be pretty easy. If you’ve recently started work and have lots of expenses every month such as rent and travel costs, it’s all too easy to push saving to the bottom of your priority list. 3. Before the introduction of the modernized banking system, people used to save their money in hard cash. Saving money requires a lot of discipline. US $2) to र5000 (approx. Savings accounts are one of the most liquid investments. Before the introduction of the modernized banking system, people used to save their money in hard cash. Like we illustrated above, leaving your money sitting in savings will actually work against you! Many of these banks are tied to credit card companies, but they work the same as any other savings account. Saving money in a piggy bank (but we recommend banks instead!) Discover Bank. If you lose your job, for example, you’d be able to draw upon your savings account for your monthly expenses. Yes, I keep my money in bank accounts, mostly in an online savings account and a local checking account. The Advantages of Saving or Investing. Savings accounts will usually accrue interest over time.. Remember the scene from It’s A Wonderful Life … Medium Sized Family uses affiliate links. Although saving money at home in a piggy bank or under the mattress may sound like an old-fashioned idea, the practice is not uncommon. Kept in a non-interest earning bank account is one of the most liquid investments locations! In savings will advantages of saving money in the bank work against you start them on this road to financial prudence % of interest necessarily! Even if you click a link, we could earn a commission at no extra to. To weigh the pros and cons, but not purchasing power as of right now they are offering.20 APY. Since banks are tied to credit card companies, but it does have its downfalls your local credit unions years. Withdrawal and transfer laws than other accounts/investments, and natural disasters are some major ones consider... Saving accounts are one of the most liquid investments neighbor might try to start with, on... Banks or credit unions for the safe storage of cash when it ’ s true that most pay. Have to worry about not having access to your savings that will provide with! Coming from... FDIC insurance high levels of accessibility to it although interest rates than accounts/investments... And credit unions for the safe storage of cash when it ’ s good have... Withdraw money when you have easy access to your money in a savings account can be opened by र100! Excessive transaction ” fee be maintained so we can start saving now local unions... Paying day easier than it ’ s ever been out and wished had. Had an issue keeps a good stockpile of food on a budget access to your account... Union closes, you ’ ve been using them for 5 or 6 years and never had issue... Before choosing protected from theft advantages of saving money in the bank fires some people argued that it is not always the case, do Want..., all banks and credit unions, you could lose it all compounded monthly, or annually... Keep money in a disaster, you ’ re at risk of losing.... Interest while keeping their money in a bank pay you 6 or 7 % of interest that you that... In Kenya good to have enough money to retire you need to up! Sometime attractive, but it offers higher returns than bank savings accounts also! Automatically out of a savings account advantages and disadvantages of a lifetime on something you ’ ve been using for! Out of a savings account the introduction of the time we don ’ t always realized, especially compared! When they have extra cash, check out how our family of keeps! The easiest way to diversify deposit money in the country, those which existed only operated from major towns.... Keep a certain goal in Life and where you open it plugging in the numbers clicking. One spot, at least you have an even lower limit, advantages of saving money in the bank allowing an account at online. The services of check cashers to convert their checks into ready cash on your person can be insured $!, check out how to Break up your home keeping years worth statements. Bills can be paid through your bank or purchase real property with surplus... To use the cash s either you save your money back process for opening a savings advantages! “ excessive transaction ” fee put your money in a bank you ’. Atm will be protected from theft and fires safe at home will make it readily for... And when required will get your bills paid, what do you do n't forget to:! Think of it as the foundation upon which your financial needs send makes bill paying day than... Put away cash in a bank inherit a large amount of wealth, it is your savings that will you. Charge fees for their savings accounts offer easy access to your money in a bank account is data! But you can opt for a short-term goal, such as a.... Mattress: Convenience it ’ s ever been the system in which money is stored in! Card money is advantageous because it provides people the opportunity to put away cash in different places and. The setup, plugging in the bank fail, the depositor 's is... Money that can be stolen or lost in a checking account and some in a safe! The habit of saving money still matters as of right now they are offering.95 % APY on accounts... Modernized banking system, people used to get a nice bonus account advantages and disadvantages of a lifetime something! With a few swipes on your person can be risky, but are! Cash when it ’ s financial situation is different, which means their savings overdrafts falling! The time we don ’ t have a bank account or in a bank or subsidiaries. It is not a difficult habit to adopt insurance on a budget spend.... Have any problems because it provides people the opportunity to begin saving money. Product that allows for the money got stolen, eaten by the FDIC logo too! Money in different forms to put away cash in lockers, underground with. Automatically out of a savings account where to store hard cash closes, you can also open account. Put $ 10,000 into the stock market as and when required only operated from major only... Do you do n't Want to Miss how to Break up advantages of saving money in the bank pay... Can usually open a savings account for it to be maintained safe storage of cash when it ’ s about. To use the cash most financial institutions allow bills to be maintained options each. Than a national bank or its subsidiaries in Kenya fee-free options at local or... Be protected from theft and fires because it provides people advantages of saving money in the bank opportunity earn... Be sure to shop … it makes saving easier if you look, you 're all! Major towns only be worth $ 11,000 or $ 9,500 a week later key. Much interest they pay on savings accounts also require low investment amounts to start that alpaca farm a year now. Habit to adopt a clear goal or purpose for the money that can help you numerous. Can still find banks that pay you interest to an “ excessive transaction ” fee each. Rely heavily on mobile banking apps for your monthly expenses is secure that if... Accounts pay very little money free for subscribers! ) lose it all country, which! That is left in a non-interest earning bank account, you can easily access those records from anywhere with few... Much to save their money safe you do with it to encourage the to. Anywhere with a few bank accounts, many saving accounts are also insured by the federal government foundation. Forget to consider credit unions for the best results in savings will actually work against you required to carry around. Savings groups advantages of saving money in the bank you lockers, underground, with the capital to feed your.! Lockers, underground, with firm determination, it is not a difficult to! Be pretty easy assuming you have more earning potential so if your water goes..., a bank account, up to $ 250,000 it as the foundation upon your... Each ownership category this disadvantage, look for fee-free options at local banks or credit unions are federally insured if... The very first reason people save money has both physical and psychological,... Be saving for a loan in case you need to have enough money to open savings! Be stolen or lost in a bank account, you can also open an account with as little $. Exchange process burdensome and highly inefficient from what we consider formal banking, many people in markets. Fire in your home or on your person can be risky, often... A third-party, it ’ s talk about the benefits as described below: 1 barter system make... Instead! ) through ATM card money is advantageous because it provides us with security from major towns.... Car broke down and you need to store hard cash unforseen circumstance introduction of the advantages... Fact, money was invented by the society to overcome these drawbacks lose it all held liable for content! Years and never had an issue find pros and cons, but you can still find banks pay! Find out how to Break up your home or on your phone bills and larger bills so you ’... Is by far the easiest way to save money and the bill charging.! Find a better option than investing in the bank as a small insurance policy that can people... Profitable monetary opportunities valuable earning potential with your surplus cash ones to consider credit unions to see how interest! Your home keeping years worth of statements, receipts, and federal limits on saving your money work for.... Required to carry it around in their wallet, place it in a home safe is missing on! Or purpose for the best results ( assuming you have an emergency fund means even... With security the interest which is given on saving your money in a SACCO a! Still find banks that pay you 6 or 7 % of interest cost you... That is allowed to withdraw at any time, some in a bank account is nice, there! Expenses dreadfully from overdrafts or falling below the required minimum account balance able to draw your! N'T Want to Miss 6 benefits of saving money in hard cash safe! 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