A savings account can aptly be defined as an account that is used to deposit money at a certain bank or credit cooperative which basically earn investment or interest on that said account over time. You can actually add or get back your money from the account by any time you wish by just visiting the bank. Usually you can withdraw or add more money to your savings at any time; without any cost whatsoever. Banks may however require from you a minimum amount in order for you to open or maintain the account.
This kind of account is considered to be the easiest account for young kids to open. Because of its being simple, it is the primary account for a lot of people and is used by all ages. Another term for savings account is a passport savings or a statement savings
Advantages & Disadvantages of a Savings Account
You may have been investing or putting deposit or money into a savings account at your local bank or credit union for your entire life without stopping to think about the advantages or disadvantages of such an account. When it comes to money, it is vital to be aware of your choices and to understand any type of account you use.
Advantage:
- Protection: Almost all bank institutions and certain credit cooperatives are usually secured, meaning to say, your money invested and deposited with them is secure and safe. In this manner, you can always have a money back guarantee. You may get it anytime you want.
- Automatic Deposits and Payments: There is a convenient and beneficial in keeping a savings account. This is the automatic payments and deposits which your employer may establish or set up in order to manage your account more efficiently. Your work employer could even deposit directly any amount you wish to be deposited to your savings account.
- Saving for the rainy days is basically the primary point of this whole scheme of keeping a savings account, in other words, to save money. You may intentionally open a savings account with the option of not having an ATM as its benefit so that it would not be tempting to withdraw your money anytime you want to buy or eat something somewhere.
Disadvantage: They are not as much disadvantage but yes we can count those as Deficiencies.
- Minimum Balance : One disadvantage in banking investment is the required maintaining minimum balance so as you will not avoid extra payment or additional fee to your savings account. Some of those banks asks only $25 for you to maintain in your savings account, but other banks may require higher amount which vary from $50-$1000. You can always search the internet for the lowest minimum maintaining balance that you can afford.
- Interest Rates The interest rate of savings account sis the lowest,interest wise. Of all the other forms of banking investment, savings account would not guarantee you a huge amount of interest or return of investment because your money is simply being kept for emergency transactions by the bank.
Other than this you must read Advantages and Disadvantages of Online Banking
In conclusion, it is indeed very important to invest in savings account because it will make your future stable and bright. No matter how small is the savings, it doesn’t matter since, it is better to have a small investment and make it grow than to have no savings at all. Savings account will make you ready for the rainy days, so start saving now.
