Savings accounts are one of the most popular types of personal finance accounts out there because they are generally safe, easy, and usually provide some amount of interest as well.
This isn’t to say, however, that saving accounts are for everyone. If you’re in a position to save money, however, putting some away into a savings account may well be the best way to do it. It provides a whole new avenue of banking and financial health and has a host of benefits that go along with it.
Easier to Manage (Cash and multiple accounts)
One of the main reasons that people tend to put money into a savings account is that they make it extremely easy to manage your money effectively. Running all of your finances from one or two checking accounts can make keeping track of your money a very difficult thing to do, no matter how careful you are with your spending.
Having an easy and accessible way to save your money is one of the best things a saver could ask for. There is a designated account that is used for the sole purpose of saving your money and separating it from necessary and disposable income alike — allowing you to budget better than ever.
Savings accounts are also a much safer alternative to other forms of saving money, especially when thinking about cash. Having one location where you keep all of your savings is a huge asset to a massive number of consumers.
Difficult to access
Although savings accounts are easy to use and make managing your money a lot easier than other types of bank accounts, it also has to be said that they also have another benefit, and it’s actually often disguised at first glance as an inconvenience.
One of the biggest arguments for why you should put money into a savings account rather than anywhere else, is that a lot of the time, saving accounts are actually harder to get money from than other types of account. It’s actually a very useful aspect.
Having this feature gives an added layer of resistance from impulse purchasing. In a few cases, you’ll have to actually call the bank to withdraw the money rather than being able to do this from an app, though this is extreme and quite rare. But these kinds of protective measures can be key in protecting you from borrowing from yourself.
Interest Rates
Of course, the next place to go when looking at all of the many benefits savings accounts have to offer is with interest rates. It’s one of the main reasons that they exist in the first place over using a second checking account.
In almost every case, saving accounts will offer interest rates at a percentage per year for the account balance that is paid periodically. That figure can be vastly different depending on who you have your account with and the limitations to the account. Typically, easy access savings accounts are much lower than fixed savings accounts that make it difficult to withdraw and only pay interest if terms are met.
In recent years, there are other financial services offering savings accounts at much higher yields than banks tend to offer. These can be an even better way to utilize funds, but of course this largely comes down to individual preferences.
Low to no Fee Accounts
Another perk of savings accounts is that they’re incredibly cheap to manage. Although some high interest accounts may have slightly higher fees than others, generally speaking, the requirements for savings accounts are extremely friendly.
There are typically little to no monthly fees for a savings account, and that’s the first port of call for a lot of avid savers looking to save every dime they can. When there are fees, they may be incurred through withdrawing more times than is allowed within a given time period — but that’s a different situation altogether.
It’s also highly likely that you’ll be able to save as much or as little as you want without any repercussions — and that’s another big benefit of savings. Many checking accounts out there will charge you if you don’t carry a high enough monthly balance, which though typically quite small, can still be impactful for those with lower incomes. With Cashero, on the other hand, there are no minimum balances required. Saving accounts rarely have this in place as long as you keep saving a reasonable amount and don’t let the balance fall too low.
Lower Capital Risk
Finally, the last reason that we will look at as a justification for using savings accounts over other methods of financial management is because of the safety that the accounts provide against other types of long-term investment plans.
Savings accounts are almost impossible to lose money with, since that is the very essence of their existence. Of course, some accounts are safer than others with the consideration of financial institutions being able to collapse, but with modern technology, government intervention, and insurances, your money is extremely safe when in these accounts.
When we put this into comparison with other types of bank accounts out there, that’s not something that’s very commonly seen. Things like ISAs and investment accounts operate on the other end of the risk spectrum, since your funds are being invested either by you or for you, in which case your capital is at risk depending on the decisions made. This can go badly in some cases, where savings accounts can’t.
Conclusion
All in all, savings accounts are a great way to protect your money, get more interest, and most importantly of all, save more money! You’ll have less to spend, have a harder time doing it, and may even get that kick you need to push you in the right direction.
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As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
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