A savings account is a type of interest-bearing account offered for the most part by banks, credit unions and financial institutions.
What Makes Savings Accounts Different from Checking Accounts?
Checking accounts hold money you would use regularly, which is why they often come with checks or debit cards. Savings account funds typically stay in the account, hence the term “savings.” Because these accounts don’t behave as checking accounts do, they often come with limits on usage to prevent you from accessing them too often.
Are There Advantages to Using a Savings Account?
Savings accounts allow you to store money for near and long-term goals. Because savings accounts pay interest, it’s better to leave money you’re not using in one, so it can grow and benefit you without you needing to touch it.
A savings account can work extremely well as an emergency fund. It’s also good for saving up for a large purchase, such as a down payment on a car or home.
How Much Money Do You Need to Open a Savings Account?
The minimum amount of money needed to open a savings account varies by financial institution. In addition, some will want you to maintain a specific balance in the account or pay a fee each month. Not all banks work that way, and it can often depend on the type of savings account you have.
Are There Different Types of Savings Accounts?
Different banks and financial institutions offer various types of savings accounts.
• Online savings accounts
• Money market accounts
• Certificates of Deposit (CD)
Each of these will offer different types of requirements and interest rates, but also can have increased restrictions on how you use and access them. Many banks also offer variations on the traditional savings account, which will be accompanied by their own set of regulations.
How Do You Open a Savings Account?
A bank will often let you walk in and open an account with no appointment. Many will let you do it online or over the phone. You will need cash, a check, or a debit card to fund it depending on the institution. From there, you can set up automatic transfers or manually bring money into the bank whenever you want to add funds.
If you’re looking into getting a savings account or an additional savings account, you can contact us to learn more and apply today!