Do I Need a Savings Account?

Withdrawing Savings Account Funds Concepts

If you’re asking whether you need a savings account, you just took the first step towards greater financial responsibility. A savings account is something you can get by without, but there are lots of savings account benefits.

What is a Savings Account?

A savings account is somewhere you can store cash that doesn’t need to be used right away, just like a squirrel storing up nuts for winter. They come with higher interest rates than checking accounts, so you can use them to make your money grow through compound interest, and you can usually set up a savings account for free when you open a standing checking account.

Savings Account Benefits

You might think you don’t need a savings account because you have nothing to save at the end of each month. The truth is that you might have nothing to save at the end of each month because you don’t have a savings account, not the other way around. Having a set place to transfer money each month provides the incentive to save, and limits on how many withdrawals you can make means it’s less tempting to keep dipping into those funds. Beyond saving for future purchases, further savings account benefits include:

  • Emergency Fund: You never know when you might need a chunk of cash to cover unexpected costs in the future. Setting up a savings account is a good way to build an emergency fund.
  • Security: Savings accounts are federally protected up to $250,000. Even if your bank goes bust, you’ll get your money back, up to that amount.
  • Protection From Credit: If you want to make a large purchase in the future, it makes more financial sense to take some money from your savings account instead of paying for the item on credit and dealing with interest payments.

Do You Need a Savings Account? It’s a Good Idea

At Xpress Cash, we know all about money-saving strategies and bank account types, so contact us today or visit your nearest location — we have branches in Idaho, Michigan, and Wisconsin.