Five reasons to have a savings account

These days, you have many choices for managing and saving money. We recommend starting with a bank checking account and savings account. The two work well in partnership.

A personal checking account offers convenience, and is best for making purchases and paying bills. It typically includes paper checks and a debit card for easy transactions on the go. You can use the account for online bill pay, and link it to your digital wallet and peer-to-peer (P2P) payment apps like Zelle^®.

A personal savings account works best for setting aside money in an emergency fund or planning for a large purchase – like a car, a wedding, a college education, a vacation or a home down payment. Here’s how a savings account can help you reach your goals, especially when you make regular deposits into the account.

In a savings account, your money is:

• Safe and secure

  Unlike cash stuffed in a mattress or hidden in a shoebox, the money you keep in a bank account is safe from theft and household or natural disaster, like a fire or flood. Plus, when you have an account at a federally insured bank, up to $250,000 of your total funds on deposit at that institution are protected by the Federal Deposit Insurance Corporation. It’s one reason we proudly display the FDIC logo in our branches, in our website footer and on our materials.

• Earning interest

  To help your money grow, savings accounts typically pay a higher interest rate than checking accounts. And if you have funds you don’t need right away, consider making them work harder for you by putting them into a certificate of deposit (CD) account. See our blog, Understanding Certificates of Deposit and CD Ladders to learn more.

• Out of sight

  Compared to cash in your pocket or funds in your checking account, money in a savings account is slightly less visible, leading you to pause before spending it. You can also set up direct deposit so your paycheck is deposited directly into your savings account, avoiding the risk of loss or delays in the mail, and saving you trips to the bank to make deposits. 

• Still accessible

  Savings accounts offer the flexibility to pay bills online and transfer funds to checking or savings accounts at the same bank or other institutions using online banking. And, depending on the account, you may be able to link it to your digital wallet or P2P apps. So while a savings account may not offer the quick tap-and-go payment of a checking account debit card, you can still access your money when you need it.

• Accounted for

  You’ll receive monthly statements, online or in the mail, detailing your transactions and interest earned so you know how you’re doing in pursuing your savings goals. Depending on the financial institution, you may even have access to online tools, like our free Personal Financial Management (PFM), to track your spending and manage your budget.

In addition to savings accounts and CDs, there are other accounts to help you save, like money market savings accounts. These earn interest and sometimes include an option to write checks. 
To learn more about other topics referenced in this article, read our blogs, Reasons to Have a Rainy-Day Fund and How to Start Yours, Digital Wallet 101, and Protect Your Finances—What to Know When Using P2Ps. And always feel free to talk with a member of our team. We look forward to assisting you.