Perhaps you’re considering setting some financial goals and are wondering where’s best to keep your cash. Opening a savings account is always a good idea, no matter what you’re trying to achieve with your finances.
Putting aside money is a great way to keep yourself accountable and monitor your spending. We’ll be discussing the advantages of having a savings account.
If you’re just starting out, opening a savings account can be seen as a low-risk investment. They offer a safe place to store your finances without you having to worry about losing your money in the process.
With a savings account, your balance will only go up rather than down, as you’ll always be earning a small amount of interest on your cash. They’re also safe from volatility, meaning you won’t lose value.
Investing in real estate or the stock market may result in your assets losing value over time, depending on the economy – whether that be over a year, three years or five years. If you don’t want to lose your money, be sure to keep some in a savings account.
Your savings account will typically pay interest on the money you deposit. The interest rate can differ depending on which account you choose and whether you opened a traditional or online account.
Compared with larger, risk-heavy investments, you won’t be seeing a huge return on your finances. However, the opportunity for your cash to be safe and reliable may outweigh these risks.
Your account is accessible
A savings account provides easy access to your funds. You can manage your money online or via a mobile app, where you can easily schedule transfers and make withdrawals where necessary.
This isn’t the case, however, for most other investments. For example, some investment products, such as real estate properties, can take a long time to sell off – perhaps months, or even years.
A place to save emergency funds
Having an emergency fund available, whether that’s for a rainy day or for when you need some extra cash instantly, is certainly recommended if you’re trying to stay on top of your finances.
With a savings account being so easily accessible, this allows you to withdraw your saved cash as and when you need it. Don’t get caught out in life’s urgencies – always have some extra cash set aside.
Easy to open
The majority of savings accounts are easy to open, meaning you can typically apply and fill out your details online within a few minutes.
You also won’t need to deposit a significant amount of money to open one either. Some can be open with as little as £1.