Having a savings account is a basic financial account to have. A savings account can help you reach your financial goals, whether they are short-term goals or long-term financial goals. There are different types of savings accounts to choose from to help you reach your goals and your banking needs.
Types of Savings Accounts
There are a variety of different types of savings accounts. While they all are savings accounts, they have different features that may make one type better than the other for your specific needs. In addition, each type of savings account has its own key features and benefits to help you narrow down your choice.
Regular Savings Accounts
A regular savings account is a deposit account offered by banks and other financial institutions. They allow an individual to deposit and save their money in this account. The purpose of a regular savings account is to have a secure place for individuals to store their money, earn interest, and access their accounts as needed. Savings accounts will be NCUA insured to give you peace of mind that your money is safe in these accounts.
Key Features of a Regular Savings Account
- Interest Rates: Regular savings accounts offer individuals interest on their deposited money. These rates vary by bank. Typically these savings accounts have lower interest rates.
- Accessibility: A regular savings account allows an individual to access their money at any time through an ATM, online banking app, or by visiting the physical bank branch location.
- Withdrawal Limits: Most banks have a set number of withdrawals that you can make for no additional fee. Any additional withdrawals may have fees. The idea is that this encourages an individual not to use their savings account like a checking account.
- Fees: Each bank has different fee structures, but most savings accounts have a type of monthly fee. Usually, these fees are waived if an individual has a minimum balance in their account which will be defined by each bank.
Money Market Accounts
A Money Market account can help you earn higher dividends than you would on a traditional savings account. It’s the perfect account to grow your savings while maintaining access to your funds. Save for a major purchase or an emergency fund; either way, you’ll have access to your funds whenever you want! A Money Market account has the same benefits of allowing an individual to have a safe and convenient place to save money while earning higher dividends on the money they invested.
Key Features of a Money Market Savings Account
- Interest Rates: Money market accounts, just like a high-yield savings account, will give you more interest earned on the money you deposited.
- Fees: Certain banks will require a monthly fee on a money market account. Banks can waive this fee with a minimum balance in that account. Each bank will have different requirements.
- Check Writing & debit card: Money market accounts provide you with the interest-earning account of a savings account with the check and debit card access of a checking account. You will be able to write checks or use your debit card on purchases, but be mindful of any withdrawal limits. Use your checks or debit cards when you have a known large expense that you want to use your savings for. It gives you the confidence of not needing to physically withdraw money from an ATM or branch.
Advantages of Having a Savings Account
Having a savings account is a basic financial account to have to help you reach your financial goals. It is also a place to provide you with a safe place to store your money while earning interest.
- Easy and Safe: Savings accounts are a safe place to save your money. The funds in this account will be insured by the National Credit Union Association (NCUA) to at least $250,000. You can have peace of mind that your money is safe and protected.
- Interested Earned: Any type of savings account will provide you with some type of interest earned on the money you deposit into the account. So while you are saving money, you also have an opportunity to safely grow your money.
- Access to Funds at Any Time: Most savings accounts allow you to access your money almost at any time of the day. You can access your account when a branch is closed with mobile banking. You’ll also have access to ATMs and physical branch locations.
- Opportunity to Build an Emergency Fund: A savings account is an ideal place to build an emergency fund. This money can be stored in a safe place and earn interest that you can set aside for a rainy day.
You can CLICK HERE to learn more about all the Savings Account options with Community Resource Federal Credit Union. Then apply to open your account today!