A savings account helps people achieve all those goals for which they would have been dreaming for a long time. It is a kind of account that comes with countless benefits for the users.
A savings account is a term very commonly used almost everywhere. A lot of people believe in getting a savings account for many reasons and this may have a lot of positive sides to look into. A savings account is a service you will get in every bank and people who started from scratch having a few bucks in the pocket are now millionaires with a savings account.
A lot of people might not be convinced with the idea of having a savings account, but here we have highlighted numerous reasons which must be taken into account as to why choose to open a savings account.
Curtails Overspending (i)
It is human nature that we end up spending unnecessarily when we have a monthly earning; sometimes we end up spending on this we never need. This means we need to put a full stop to this habit of ours. A savings account may be a perfect choice in this regard. By exercising the idea of having savings account options we cut down our excessive expenses, we know we have to spend our earning in a budget and have to put some amount in the savings account. This act helps us develop the habit of saving money and also compels us to avoid overspending.
Asset for Emergency
Emergencies come uninvited and you never know when you might come across a medical emergency or something in your house demands immediate cash. Savings accounts play a very important role during such emergencies. A savings account allows you to accumulate money and then by way of savings account interest rates your money tends to grow. At the end of the day when you withdraw money, it has grown a lot and you can easily use the same for all kinds of emergencies that need spending.
Growth of Money
Many people think that savings can be done at home and they don’t find savings account beneficial. Well, there is no doubt that you can also save at home but that money won’t grow. Whereas, people who opt for high yield savings account actually can witness the excessive speed at which their money multiplies. You can’t enjoy this growth by keeping your money but you can have this chunk if you choose to have a savings account.
Safe and Secure Approach
Savings accounts are very safe, if you keep this much money accumulated at home you will always be at risk. Money at home is not inspired but money in the bank is insured. If a robbery takes place in your house you won’t get your money back. So, rather than keeping a huge amount of money at home, it is better to keep it in the bank, it will stay secure, safe, and growth which is the benefit you will enjoy along with the rest.
Saving on Purpose
A lot of people have different dreams and goals for which they wish to save; keeping money at home might end up being used for unnecessary reasons. However, when the same money is accumulated in a bank account it not only is safe and unused but also increases over time. This accumulation when carried out for years and years it compiles and then achieving the purpose for which a person is saving tends to be easier. This way achieving your dreams ad goals becomes a piece of cake that was not possible with a savings account.
Free Savings Account
A lot of banks offer a monthly fee over the savings account you have in their bank. However, nowadays many online banking systems have been in place which allows you to have no monthly fee savings account. So, it also cuts down on the cost of maintaining an account for your savings purpose. This factor attracts more and more people when it comes to looking forward to savings because people don’t have to worry about the cut down of fees every month from their savings.
Downsides of Savings Account (ii)
- The downsides of savings account also need to have an eye on, although you can find many reasons to have hands-on a savings account, at the same time you must also have an idea that what negative options could be there.
- Most of the banks offer a very low-interest rate for your accounts, which means you might not be able to earn much out of these accounts as you have expected.
- Many banks accounts impose a restriction on the account holders regarding withdrawal of money from their account, which may cause them problems especially when they need immediate cash.
- There are many other options as well which may offer a better turnover as compared to the savings account and a lot of people might get inclined towards those interest-earning approaches rather than a savings account.
- You might be required to maintain a minimum balance as laid down by the bank, in case if you don’t do that there could be a fee required to be paid instead.
- The interest rates are fluctuating that can at anytime move down or ups and it may be somehow stressful for the account holders because they are unable to set their realistic goals.
Savings accounts are gaining a lot of popularity among people; especially youngsters are very much inclined towards this means of savings. It is a very helpful approach for students and teenagers and especially when they have limited saving they make handsome amount out of it. However, people who have high expectations regarding savings and earning interest must consider other options. Before choosing this means of investment always analyze your decision in the light of its pros and cons so that you can always make the best decision regarding your investment and make the most out of it as it has sufficient earning potential.