Advantages and Disadvantages of a Savings Account
Savings accounts are something that are embedded into us to have. They provide a safe and secure place to tuck money away for the future. Saving accounts provide some great benefits to the people that utilize them, but they may be surprised to learn that they have some draw backs as well.
Advantages of a Savings Account
- Protection – Most of the credit unions and banks are insured which means the money that is deposited is secure and safe. Whatever happens in the near future, the money is still there and can be acquired.
- Keeping the Money Liquid – The money that is placed in saving accounts can still be accessed at any time. This is different from other types of retirement funds that you can set up. The good thing about this is that if an emergency arises, you have the comfort of knowing you have constant access to all of your money.
- Start Investing on Minimal Cash – As for any person that is interested in investing on minimal cash, he or she can opt for a savings account. The saving habits can be started right away by opening or using this account.These accounts can be opened with as little as 25 dollars through most banks. This money begins to earn interest, the exact amount depends on the bank and the amount of money you have in your account.
- Money is Insured – Upon putting the money in the savings account, rest assured that the money is insured and safe. This is the reason why many people are interested in savings account. However, it still depends on the credit union or bank that insures the money for up to two-hundred fifty thousand dollars.
- High Yield Options – Other savings accounts are after offering high interest rates as compared to others. There are options that are mainly ideal on saving for a long-term basis, like emergency funds. The majority of savings is done on a strict process online. Luckily, there are banks that allow for high interest rates. If you are interested in processing banking online, there are substantial returns on the money as compared to the local branch.
Disadvantages of a Savings Account
- Time Delay on Transaction – At times, the transfer of money may be delayed for one or many business days. This still depends on the bank that you do your transactions through.
- Lower Interest Rates – The interest rates that are offered on most saving accounts is pretty low. This means that the rate your money will grow is very slow.
Although savings account have disadvantage and advantages, it is still good to consider this as an option of saving money for emergency cases and future needs!