There are a number of benefits of a savings account. Unlike a checking account, this money is not used for everyday expenses but is set aside for multiple reasons. The bank also rewards those who have savings accounts at their financial institutions. The following list outlines a few benefits of a savings account.
One of the benefits of a savings account is that it is a safe way to accrue money instead of keeping large amounts of money in the home. In addition, money place in banks are kept in fireproof safes.
A savings account is the best way to set aside a rainy day fund, money that may be needed if an emergency or unexpected expense arises.
People with children can set up a separate savings account for their children as soon as they are born. This account is not attached to their checking account and is a way for them to save money for their children’s college tuition.
Money set aside in a savings account is insured by the federal government; therefore, even if the bank folds, individuals don’t lose their money.
Another benefit of a savings account is that the bank pays individuals interest on money kept at their band. In a sense, they are being paid by the bank for giving them business.
Individuals who set up an automatic transfer from their checking to savings account easily pay money into this account. One of the benefits of an automatic transfer works the opposite way as well. If individuals come up short in their checking account, the difference can be taken from their savings account.