Why you need a savings account – American Heritage Bank
Saving money is an important part of a healthy financial future.
Life isn’t predictable, and knowing that you have cash on hand for emergencies, education and even the down payment for a home or automobile can be both comforting and vital during economic shifts.
Additionally, you can play an important part in teaching your kids or grandchildren about saving for a rainy day by helping them open their own savings accounts.
Small minimums, huge convenience. The great thing about opening a savings account is that, while the interest you earn may currently be low, the minimum balance is small. Plus, it’s convenient. You can make deposits and withdrawals at your local bank, or enroll in on-line banking and make transactions with the click of a mouse. You can monitor your account 24/7 and download your savings account statement too.
Protected and FDIC insured. Depositing money into a savings account is safer than socking it away in your mattress. Should a burglar ever enter your home, at least he won’t leave with cash in his pocket. Plus, you can monitor your account anytime, especially if you select on-line banking. Also, you’ll have peace of mind that the Federal Deposit Insurance Corporation (FDIC) insures your savings account up to at least $250,000.
Large purchases. Saving money for a new automobile or a cozy home is part of the American dream. Contributing regularly to a savings account is the beginning of achieving the things you want in life. Once you’ve accumulated enough money, you can graduate a portion to higher-yielding interest-bearing accounts, such as Certificates of Deposit (CDs), money market accounts or mutual funds*. Just beware that with some funds, you can’t access your cash immediately, as you can with savings accounts.
Higher education. A savings account is a great way to have your child or grandchild start putting money away for college or trade school. This money can also be used for textbooks, meals, dorm furniture and other costs associated with school. Alternatively, you might select to set up a “529” plan for your child’s higher education, which offers tax benefits.
Money for emergencies. Setting aside money for an unexpected transmission rebuild or a speeding ticket ensures that you can pay for emergencies without going into debt. A traditional savings account can bring you peace of mind when things get rocky. Many financial experts recommend having at least six months’ worth of savings for emergencies, while others recommend nine to 12 months’ worth.
Having a savings account in place can help you stick to your household’s budget more easily.
You’ll not only be saving money for the future, you’ll be more judicious about how you spend your cash, which is a great lesson for youngsters to learn too.
Sticking to your savings plan can help you meet your financial goals. Talk to us about savings products and services for the entire family.
Source: American Heritage Bank
Copyright 2012 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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