Thought about owning a home, taking a dream vacation, or what might happen if you lost your job? A step to making those dreams a reality or preventing financial hardship is to have a savings account. Here are four reasons why you need to have a savings account.
Helps with unexpected expenses
Things can happen in life that is unexpected. Accidents, job layoffs, unplanned bills, etc. can all leave you with expenses you weren’t prepared to have. With a savings account, you have easy access to the money you need. Essentially, your savings account acts as an emergency fund to cover those unexpected expenses. The general rule of thumb is to have three to six months’ worth of expenses covered. This helps you not have to increase your credit card usage, which could damage your credit score.
Savings are protected
Our savings accounts are FDIC-insured, meaning that deposits you make up to $250,000 per account have federal protection against bank failure or theft. This insurance by the government helps keep your money safe without risk.
Savings accounts are a great way to earn interest on your money. By compounding your interest, your savings will grow faster as you keep reinvesting your earnings. Rates vary based on your financial institution and the amount of money in your account. See our rates on savings accounts.
Save for things you want
A savings account lets you set aside money for things you want, like buying a house or going on a dream vacation. This account is separate from your checking account, so you can keep adding to it each month until you reach your goal without touching it. You can also have multiple savings accounts to help keep track of different goals you have.