Proverbs 18:9 – “He also that is slothful in his work is brother to him that is a great waster”

 

Savings Account: Is It Worth Having One

With interest rates falling to historic lows, many are asking, is a savings account worth it?

Some banks are no longer offering “Free” saving accounts anymore! Thanks to inflation and possibly a Second Great Depression.

While having a savings account offers you ease of access and the ability to earn interest.

This liquidity and easy access to funds is essential when you need money quickly, such as for an unexpected expense.

 

 

Having a savings account is safe for most right? Maybe you stick the money under your mattress? What if your house burns down?

Or perhaps you’ll put that money in the stock market. While you may earn a return in the long run, what happens if you need to access funds precisely when the stock market takes a dip?

Savings accounts are safe. Your money is there when you need it, and it’s protected by FDIC insurance (or the NCUA in the case of credit unions), up to $250,000.

The bottom line is that your money is available when you need it, and you can rest easy knowing it won’t decline in value.

Or at least that’s what most consumers have in mind?

 

 

Said differently, if your money is earning less than the rate of inflation, your dollars are becoming less valuable over time.

While savings accounts may not make you money on an inflation-adjusted basis, they’re better than the alternative, which is near nothing.

Savings account help you track your money goals, whatever that may be!

 

 

Benefits of a savings account

If you want to create an emergency fund, one straightforward way to do so is to open a savings account.

You can set up a dedicated savings accounts to track other money goals like taking a special vacation or buying a new car.

One of the best features of savings accounts is that they make it harder to spend money.

Separating saving money from spending money can make it easier to stay on track with your money goals.

 

 

Setting automatic transfers from your checking to savings account, you’ve helped create a forced savings plan for yourself.

Savings accounts are not pointless unless you’re using it wrong!

 

 

The cons of a savings account

The number one disadvantage of savings accounts is that they offer very little interest in today’s low-interest-rate environment.

A savings account is not an ideal place to grow wealth.

There was a rule in place called Regulation D, which limited the number of withdrawals from savings accounts to six transactions per month.

Many banks have held the restrictions in place.

 

 

You cannot use your savings account as a checking account. Expect to be limited on the number of transactions you can complete each month.

Lastly, not all savings accounts are free. Some still carry fees (Bank of America $5 a month).

For example, some banks still charge a monthly account maintenance fee or have minimum balance requirements.

 

 

 

Conclusion

You are losing money to inflation. You should not be paying any sort of ongoing fees for a savings account.

Interest rates on savings can’t even keep up with inflation.

The purpose of a savings account is having a safe place to store money that you won’t use right away.

A savings account is the best place for storing your emergency fund.

Without emergency savings, you may have to take on credit card debt, personal loans etc. all which will hurt you financially.

 

 

 

As long as you’re using a legit bank or credit union, your money is protected.

Now, though I have said all of this I still feel you should keep some money on you!

No, I cannot vouch to “keep” all of your money in a bank especially because of the times we’re living in.

With that being said, if you feel a safe will help you sleep at night then by all means do so.

 

 

I suggest you have alternative methods of saving your money.

You could put some of your money into tangible assets that way it has a real chance to create “real wealth”.

You have to do what’s best for you and your family finances.

 

DISCLAIMER: I am not a financial adviser. This site is for educational purposes only. It is imperative that you do your own research. I am sharing my opinion from personal research and experience with no guarantee of gains or losses on investments, finance etc.

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