About Savings Accounts
Setting aside a small percentage of every paycheck is key to establishing — or improving upon — good savings habits that you can use to take better control of your personal finances. But where is the safest place to keep your hard-earned money? Long gone are the days where saving for the future was as simple as hiding your excess dollars in an empty jar. If you want your savings to work for you, it's important to use a savings account that suits your financial needs. Take a moment to learn if a savings account is right for you.
Reasons to Save
Does a savings account make sense for your financial situation? Like any other financial tool, savings accounts have specific uses that may or may not suit your needs. Here are a few situations where a savings account could work for you.
- Building a Nest Egg. A nest egg is possibly the most common reason people save. Having a cache of funds stored away for emergencies is an excellent financial decision. Unexpected expenses can quickly cause financial difficulties, especially if you're watching your spending. Your nest egg acts as your financial safety netÑtaking care of those expenses without impacting your carefully planned monthly budget.
- Saving for Future Purchases. Whether it's a new car, a trip to Europe, or a new computer, we all have more expensive purchases we would like to make. Instead of using a credit card, which will bill you later with added interest, try saving a little with every paycheck and storing it in a high-interest savings account. You'll be able to make your purchase before you know itÑwith no credit card bills later down the road.
- Protecting Against Overdrafts. If overdraft protection from your preferred bank is too costly, or if you prefer to create your own safety net, consider linking a savings account to your existing checking account. You can usually set up the account to draw from your savings should you ever accidentally overdrawÑsaving you from costly bank fees. It's also useful to have linked checking and savings accounts to easily transfer funds back and forth.
- Growing Your Investment. Investing is a big step. You may know how much you want to invest but not where or how you will invest it. And, storing that amount in a checking account until you decide on your investment strategy may put the money at risk of being spent. Instead, consider storing your investment in a savings account. Depending on the account you choose, it could even begin to accumulate interest before you begin investing it elsewhere.
Want to know more about savings accounts? We can help. Take a look at our Choosing a Savings Account page to learn about the different types of savings accounts available, and which one may be best for you.
