Do opening a savings account comes to your mind when you think about investing your money?
And it’s quite natural too. Saving your money in such accounts is pretty boring and they don’t even provide you with enough return for the money you deposit over there. And often it’s way below the rate of inflation, especially in the US. And that’s why it’s not as attractive as investing in stocks, bonds, real state, or other things.
But this kind of accounts comes with some pretty amazing perks which you’ll not get from putting your money inside the jar.
In this article, we’re going to reveal the top four benefits of opening a savings account. So, let’s dig in.
Your Savings Account Is FDIC-Insured
So, what does it really mean to be FDIC-insured?
Well, it means that FDIC will automatically insure your savings bank account’s money up to a limit of $250,000. It means even if your bank fails to keep your money safe or if the bank goes out of the business and you had up to $250,000 in your bank account, then you will get your money back, immediately from FDIC.
You’ll rarely see this kind of protection in other money schemes or investments such as stocks, mutual funds, or cryptocurrencies. For example, if you invest $100,000 in a company’s stock but the company goes out of business the next day, you’ll lose all your money and won’t get it back.
You Can Get The Cash You Need Anytime
You can’t take your cash out anytime you want when you invest in stocks, mutual funds, and bonds. And if you seriously need to take your cash out, you’ll have to go through a lot of hassle with the previous options.
But that’s not the case with a savings account as you will always get a debit card whenever you open one. With that card, you can shop at malls, pay for dinner, and even take some cash out from your nearest ATM if you want.
So, you’ll always have the cash available if the emergency arrives.
You Can Start Small
Let’s face it. When you’re investing your money in stocks, bonds, or real state properties, you can’t really start with a $100 per month budget. You need thousands of dollars to start with, if not tens of thousands of dollars.
But you don’t have to worry about your starting budget when you start depositing your money into a savings account. You can start with as little as $100 and it’ll gradually add up.
Check with the banks whats their minimum deposit requirement to keep your account active without spending any extra penny.
Your Savings Account Will Give You A Return Too
Well, you won’t be rich from the annual interest you get from your savings account, but it’s still extra money. And the best part is that there isn’t any risk involved with it.
Generally, most savings accounts will give you an annual return of 2% on your deposited money. Although it’s not as high and flashy as the returns on stocks, your money won’t be at the risk of being wiped out.
However, the rate of interest is also going up in the last few months. So, it’s still a better option than keeping your money inside a jar.