The idea of opening a savings bank account is not bad at all. Saving is important, and a savings account can help you a lot to accomplish that purpose. Of course, that is our money, sure you are wondering what are the pros and cons of a savings bank account.
I get you man, you simply don’t want to put your money anywhere and see how it goes. A savings bank account has many advantages, and some disadvantages as well.
You may be interested in:
- How to get a short term business loan for my company?
- What is considered working capital for a business?
However, creating a savings bank account is a good decision no matter your actual situation. This works as a mobile or a tool that you can use for saving, and also you are contributing with the state as you do. Wait, how am I helping the state by putting my money in an account? You would be surprised.
Do you think opening a good bank account is a good or bad decision? What do I have to consider before putting all of my money in a savings bank account? What are the pros and cons of investing in a savings bank account?
All of this questions and more will be answered here, keep reading.
The importance of saving
Saving is important for any natural person or institution, it’s always good to have some money available. It’s also something that is very hard to do for some people. If you want to live well the last years of your life you should have your savings.
There are many things that you can do to save you money, and even re-invest it and multiply it. This is the principle of making the money work for you, but that’s not the topic of this post.
A good idea is to put your money in a bank account, also is important which bank you choose. Normally you would go with the one that offer the best interest rates in the long or mid-term.
Also, you can invest your money and also put it in the bank, you can also have accounts in many banks. So you would perceive interest for the money you have there. Imagine filling up an account with money and some more money after six months.
I know, six months is plenty of time, but this is way better than simply having your money sitting at home.
Is it worth having a savings account?
Now that we explained the interest part it seems like a good idea, and it is, there are more benefits apart from the interest. However, we haven’t talk about the nuisances of having a bank account, we will get to that.
Here are some of the most important advantages of savings bank accounts:
- You can pay more easily, if you are going to pay someone 12.000$ are you going to do it in cash? Maybe, what if it is 100.000$ it’s harder and dangerous to carry that amount of money. Having a bank account will allow you to pay with cards, bills, or transferences, a lot more comfortable. If you aren’t doing anything illegal (I hope not) then it’s the best option.
- Your money is protected in a savings bank account. There is something called FDIC (Federal Deposit Insurance corporation). If your bank is member of this corporation and you put your money in there just chill. Your money is insured for 250.000$, how handy!
Apart from the interest these are the most important advantages. Creating a savings bank account can be done with just 25$. It provides you cash whenever you need. And you can switch your type of account whenever you like.
All of this sounds so nice, but what about the disadvantages? Is it all beautiful? No
Is there are downside on having a saving account?
- You have a federal limit to withdraw the money from your account. The money is yours, but you have a limit to withdraw, you can’t take it all out just like that. You can withdraw six times per month, banks charge a fee if you exceed the limit.
- Interest rates can charge; the bank can change up the rules whenever they like. It doesn’t mean that they will change the rules just one day before paying interests. But you need to know that it could change, and end up being something you didn’t expect.
- Banks usually have a minimum balance requirement. This means you need to have a certain amount of money always in your account. If you don’t accomplish the minimum balance they could shorten your interests or other penalties.
Every bank has different policies and terms that you have to meet. And this is important evaluate the benefits and requirements every bank has and choose the one that works best for you.
Now the final question that everyone has:
Do you lose money in saving accounts?
I can’t tell you that we are 100% secure that the bank will not make us lose our money, because it would be lie. But I think that losing all of our money in the bank has the same chances of happening as a national catastrophe.
Something SOOO bad needs to happen for us to be in that situation, and of course you should not fear that. Remember that the money is insured by the FDIC, so we have a good level of security.
Banks use all of the money people gets into it to invest in businesses and collaborate with the government in projects. These could be building up structures, investing in businesses, repairing and improving the public space.
Yes, a part of our taxes, they also use the money in the banks! Not all of them of course, just the banks that belong to the government. But this is actually good for us, this is a way to insure that everything works properly.
This would be the final conclusion of the pros and cons of having a bank account.