CDs are a good option because they offer a higher interest rate, but you also lose immediate access to your money unless you’re willing to pay an early withdrawal penalty. But if you look, you can still find banks that pay you interest. Plus, no need to clutter up your home keeping years worth of statements, receipts, and cancelled checks. Great point! It’s also good to keep your money in different places. Unlike other financial products, savings account keep your money liquid and... 2. It’s a lot easier to spend your money when you have high levels of accessibility to it. In Kenya it’s either you save your money in a SACCO, a Bank or purchase real property with your surplus cash. 5. The interest which is given on saving accounts is sometime attractive, but often nominal. There are online banks that will compound your interest on a daily basis, but most traditional banks or credit unions will only compound your interest monthly. 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. The advantages and disadvantages of a savings account involve cash access, long-term capitalization, and safety. In Kenya it’s either you save your money in a SACCO, a Bank or purchase real property with your surplus cash. Saving money should almost always come before investing money. Savings accounts will usually accrue interest over time. Saving money is advantageous because it provides people the opportunity to earn interest while keeping their money safe. However, with firm determination, it is not a difficult habit to adopt. Saving money in a bank account does have its downfalls. Getting a piggy bank for kids is an excellent way to teach children about the value of money and the importance of savings. You receive security. I prefer to keep the bank as a middle man between me and the bill charging companies. Advantages of saving money in a SACCO instead of Banks in Kenya. By contrast, up to $250,000 placed in a bank account is automatically insured against loss by the federal government. 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. If you deposit money in bank then they will pay you for that they can pay you 6 or 7% of interest. Virgin Money view. Keeping the month in the bank retains the dollar value, but not purchasing power as of right now. Perhaps the foremost advantage of having a bank account is safety. ADVERTISEMENTS: 1. We always think that money in the bank will help us out during harsh times in life. Of course, you’ll need to have money in the account to pay the bill, but if you do, you’ll be able to maintain a better credit score over time. Saving accounts are opened to encourage the people to save money and collect their savings. Advantages: Online Savings Account. Two decades ago, there were few banks in the country, those which existed only operated from major towns only. 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. It is to be noted that the video refers to Indian banks so there might be some minor differences in the ways one opens a bank account. Savings accounts in the United States are insured.. In order to have enough money to retire you need to make your money work for you. Most banks offer multiple types of savings accounts that can keep your money safe while paying interest to help you reach your goals sooner. by Melanie Wright | Independent Money Mentor. Ally Bank. It's an easy way to save money Many banks offer an interest rate when you put your money in a savings account. There are withdrawal limits on a savings account. 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. 3. Many times you’ll find a better rate at a credit union than a national bank. Have you ever been out and wished you had a little more cash? Helps in emergencies: Emergencies are always unexpected. You can also open an account at an online bank. There are insurance limits. If you don’t have a bank account, you’re missing out on several benefits. It’s true that most accounts pay very little interest these days. Generally, all banks and credit unions are federally insured by either the FDIC or NCUA for at least $250,000. Just like Melanie, we believe that saving is important. By examining the advantages and disadvantages of a savings account, you’ll be able to make the appropriate decision for your financial health. Read more about the benefits of a savings account. 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. Saving money should almost always come before investing money. And so if you’d like to get started putting aside a little money each month, then why not take a look at our Virgin Money Double Take E-Saver. Easy to withdraw. If the bank was to fail, your money would be safe. In fact, money was invented by the society to overcome these drawbacks. Your money will be protected from theft and fires. The reason is simple. See: Best National Banks of 2020. The Advantages of Saving or Investing. 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. Take note: The rate you earn depends on the terms of your account agreement and where you open it. Yes, I keep my money in bank accounts, mostly in an online savings account and a local checking account. Is this money management tool right for your financial needs? One of the biggest advantages of a savings account is that deposited funds accrue interest over time. 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. 1. Keeping track of your bank account is easier than it’s ever been. Start with a little. Paychecks. Your money is kept safe. More From Your Money. Saving accounts are opened to encourage the people to save money and collect their savings. The Advantages of Saving Your Money at Home Easy Availability. As long as your bank is insured by the Federal Deposit Insurance Corp., money in … The process for opening a savings account can be pretty easy. Read more. Award-winning freelance financial journalist. Invest in extra food (assuming you have the space to store it). Remember the scene from It’s A Wonderful Life … Or if your water heater goes out, you could tap into your savings to purchase a new one. Have you used online bill pay? Keeping your cash in a savings account keeps you and your money safer. US $2) to र5000 (approx. There were so many instances when the money got stolen, eaten by the rats or simply rot through the years. Check cashers are usually readily available since they often operate late at night and on … They stored this cash in lockers, underground, with the grains, etc. Unless you inherit a large amount of wealth, it is your savings that will provide you with the capital to feed your investments. We’ve opened a few bank accounts to get a nice bonus. Because if you don’t have a bank account, you’re missing out. 6 Benefits of Saving Money in a Bank You Don’t Want to Miss 6 Benefits of Saving Money in a Bank. One of the biggest advantages of a savings account is that deposited funds accrue interest over time. The reason is simple. Readily Avaliable The very first reason people save money at home, money always avaliable to the person at any given time. Saving money at home will make it readily available for their needs or unforseen circumstance. The Bank cannot be held liable for the content of external websites or any damages caused by their use. I also opened savings accounts for both of my kids, so we can start saving money for them. Of course you get interest but you don’t get these perks of saving money under the mattress: Convenience. 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. Looking for money saving tips that work in your real, messy life? 3. Saving money requires a lot of discipline. A savings account is a long-term, fundamental money management tool that can help you meet numerous financial needs. Or maybe your car broke down and you need to pay the tow truck. There are also other advantages of saving money with the banks: Liquidity. Insurance on a savings account is nice, but it does have a cap on it. Like we illustrated above, leaving your money sitting in savings will actually work against you! You never know when the local ATM will be down. Despite exclusion from what we consider formal banking, many people in emerging markets have figured out their own ways to save money. Theft, fire, and natural disasters are some of the ways you could lose it all. Leaving an amount of money in the bank as savings for a long will depreciates the value in the long term since it is not really productive 3. Money has overcome drawbacks of barter system. Saving money with the banks is simple and convenient because you can withdraw money when you need it. If your savings falls below this amount, then high fees may be charged on a monthly basis until you restore the required minimum balance. Other advantages inclu… 2. 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. Everyone’s financial situation is different, which means their savings goals are different, too. Luckily, there are options for each of you. 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 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. Advantage: Bank Accounts are Insured. 2. Take note: The rate you earn depends on the terms of your account agreement and where you open it. If that's the case, don't forget to consider credit unions. All you need to have is a data connection or access to the internet. Investing money can be risky, but it offers higher returns than bank savings accounts and can help people build wealth over the long-term. [Tweet “Keeping money in the bank is one way to diversify. By contrast, up to $250,000 placed in a bank account is automatically insured against loss by the federal government. Saving money has both physical and psychological benefits, so start saving now. A savings account can earn you interest and provide other advantages. It makes saving easier if you have a clear goal or purpose for the money that you are saving. Two decades ago, there were few banks in the country, those which existed only operated from major towns only. This led to … Although interest rates have been extremely low since 2007,... 2. The interest which is given on saving accounts is sometime attractive, but often nominal. #FridayFrivolity. Savings accounts can provide automated bill payments. Checks. Perhaps the foremost advantage of having a bank account is safety. In India, every individual has a savings account. This means the full potential of your money isn’t always realized, especially when compared to other investment opportunities. Having cash on hand at home is also a good idea. Money kept in a non-interest earning bank account or in a home safe is missing out on valuable earning potential. That means you have more earning potential with your money compared to keeping it in a safe at home. If you don't have a bank account, you're missing all the benefits of saving money in a bank. Step 1 – Student is to watch the featured video Importance of Saving Money in a Bank and then to think about the advantages of saving money in a bank rather then keeping the money at home. If there was a fire in your home or some other natural disaster, you could lose your cash as well. 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