BY: John “Hennry” Harris
There are a lot of savings options and investment opportunities available today that would seem to diminish the need of having a standard savings. Savings accounts just do not yield high returns compared to other financial products that can promise a higher interest rate on your return.
Life is full of surprises that my require you to have quick, easy access to your money. A flat tire, an unexpected bill or a sick relative can easily be handled with sufficient savings on hand.
A savings account is an excellent starting point for a successful financial future. Investments may bring a higher return, but the money is not readily available because there is a time lapse before you can receive your money. Other investments may also charge a penalty, or a fee, to cash out where a savings account will allow a quick and easy withdraw of your money by draft, check or debit card.
Your savings account is insured by the Federal Deposit Insurance Corporation (FDIC) and guarantees protection of up to $250,000. This makes a savings account a great choice for stashing money. The National Credit Union Share Insurance Fund (NCUSIF) also insures your money up to $250,000 if your money is in a credit union.
IT’S EASY TO OPEN AN ACCOUNT
Putting together a good investment plan may take research and some know-how, which can be intimidating. Opening a savings account is quick, simple and easy. Financial tools like stocks, bonds, Roth IRA’s and mutual funds require minimum investments or balances, but a savings account requires no special investment knowledge – just put money in the account!
No experience or the fear of losing money are some of the biggest obstacles to overcome when investing money. Opening a savings account can open the door to investing by giving you time to learn about investment options while raising the money to invest. Watching your money grow can be a great motivator to learn another type of investment vehicle.
HIGHER-YIELD SAVINGS OPTIONS
Online savings accounts are ideal for long-term savings for a rainy day. Online savings accounts offer lower overhead costs for the bank which allows the account to garner a higher interest rate. You may have to do all of your banking online, but you will see better returns on your money when the rain is pouring.
So, if you are not sure where to begin with investing your money, a savings account is a great move.