Ever wondered if you actually need a savings account? Well, it’s always a good idea to make your cash work for you.
If you have money saved but want to have quick and easy access to it, a savings account could be just what you need.
Following are 10 good reasons why it’s a good idea to put your money into a savings account. Happy reading!
With the Financial Claims Scheme (the FCS), the Australian Government guarantees deposits up to $250,000 in Authorised Deposit-taking Institutions (ADIs) such as banks, building societies or credit unions. This means that if something happens to the bank, this money is guaranteed by the Government to be paid back to you.
Funds in your savings account are readily accessible. You can make withdrawals from your savings account during regular business hours. Some banks may offer additional accessibility with an ATM card.
Emergencies, such as losing your job can cause stress on anyone’s financial situation. Having several months’ worth of living expenses in savings can help take the pressure off until you can get back on your feet.
Big Ticket Items
You might not have the resources to make a major purchase on the spur of the moment. By setting aside a fixed amount of money in a savings account each month toward the price of a big-ticket item, you will have the funds available to pay cash and avoid going into debt.
Encourages Financial Stability
Pay yourself first. Regularly putting a portion of each pay-check into savings helps create a sense of financial stability.
Discourages Reckless Spending
It is easier to spend money that is in your pocket than to spend money that you have to get from the bank or the ATM. This “out of sight, out of mind” scenario may help discourage impulse buying.
Sets a Good Example for the Kids
Putting money into a savings account at your local bank provides you with a teachable moment with your kids. Showing your kids how to save gives them an opportunity to learn self-control. Studies suggest that children who have savings accounts have less stress, a greater sense of hope and are more likely to attend college than kids who don’t, according to the American Bankers Association.
Encourages Sound Financial Habits
Regularly putting money into a savings account is a first step in creating habits that extend into other areas of your financial life. As you become more financially literate, you may discover the need to create a budget to tell you where you spend your money, and a financial plan to help guide you toward your goals for the future.
Savings accounts pay interest on your deposits. Granted, the interest on savings accounts is minimal, but it is better than putting cash under your mattress where it earns nothing at all.
Have any other reasons? Share your comments below. And if you need a savings account, check some hot options here.
Inspiration: The Nest.