Having a savings account is imperative in recent times. Looking at the evolving patterns of consumerism in the economy, millennials are prone to spending, and sometimes even overspending, on a streak of materialistic temptations. So, to keep a tab on spending limits and save adequately for securing your future financial credibility, opening a savings account is deemed necessary!
A savings account helps in accumulating funds and gives you a financial backing in times of financial emergency. Let us look at some of the most important reasons of opening a savings account at the earliest.
- Unexpected Emergency – No one can foresee the future, but what one can do is to prepare for the future from this very moment. A savings account helps you to have a financial freedom in times of an unexpected financial emergency. Most importantly, it can keep you out of the burden of debts.
- Asset protection – Putting all your money in investments with higher market risks might cost you if there is a need for forced selling of your stocks and bonds. Having a savings account on the other hand helps you protect your capital in times of emergency. So, instead of eyeing investments with higher returns that come with higher risks, you can invest in a savings account.
- Grabbing opportunities – Having a savings account backs you with monetary support during times of need. Say, you happen to come across a great business opportunity, but you can only leverage your chances of working around it once you make an initial investment. A savings account can help you meet your immediate financial requirements without having to seek loans.
- Security – Your saved amount of money is protected by FDIC insurance. This means that even if the bank goes bankrupt or closes upon any unforeseen circumstance, the government would still have your savings released to you.
- Avoiding credit – A savings account helps you stay focused and achieve your goals and targets without having to borrow loans. Having a savings account ensures that you can pay for those unplanned bills right away!
- Scope of growth – Savings accounts can also help you make your money work for you. All you need to do is to open a high interest savings account. Your money would basically be growing over due course of time just by being there. Compare the savings account interest rates across banks and choose the one that offers you the highest rates of interest.
So, now that you are acquainted with all the right reasons to open a savings account without any further ado, it is time to understand how to take the first step. If you are a compulsive saver, then you are good to go!
But if you aren’t, it is better if you automate a portion of your earnings directly into your savings account. It also restricts you from spending enormously on things that probably might need at this very moment. The goal is to look at the bigger picture and start saving now!