Saving money for a rainy day is one of the most important thing people must do in life so that at the time of need they are not left empty handed with no finances.

It is very commonly observed that if you tend to have some money left extra at the end of the month and you keep it to yourself there are high chances that you will end up spending in some or the other way no matter the expense is required or not. Whereas, when you get a hold onto a savings account and you deposit that left over money in that you would be able to save a handsome sum at the end of the year. Saving money is always one of the most sensible approach a person may consider because saving allows people to have something by the end of the day which they may use in any kind of emergency.

What Is a Savings Account? (i)

As the name suggests, savings account is a kind of bank account where a person deposits the saved money and most of the savings accounts tend to yield interest over that saving and hence offers a beneficial add on to the owners of the account in the longer run.

Types of Savings Account

People who plan to get their hands on a savings accounts must be looking forward to the details and here we have shared the different kinds of savings accounts, their mechanism and their pros so that a sensible decision may be made by people in order to ensure that their savings are protected in the right manner.

The Usual Savings Account

When it comes to considering different savings account options the first and foremost consideration people give to the kind of account is the usual saving account which is a regular and the traditional kind of saving account in a normal bank yielding a limited interest over savings. There is nothing fancy and uplifted into these accounts and for a person looking for basic kind of saving regime with no hassle and a short term saving plan may find this account to be a suitable option.

High Yield Savings Account

The name says it all, the high yield savings account is a kind of savings account which is different from what the traditional account is like, you have no access to a physical bank and everything is just online. Moreover, this kind of account offers more of the interest on your savings as compared to the regular savings account and hence appeals a lot. However, withdrawing money any time you want is not an option here because there is no branch and no ATM, so this shall be considered as one of the most important factor associated with these kinds of accounts so that you may always have the right decision made.

Money Market Savings Accounts

Money market savings accounts are also considered by a lot of people when they look for the savings account options and they offer the features of a savings accounts as well as a checking account. When you deposit money into these accounts you will be able to earn from the savings account interest rates and at the same time you will have a liberty to withdraw money from banks and ATMs using your card or cheques like you do with your checking account. However, the banks may impose a restriction as in a certain time only a certain number of withdrawals from the account are allowed so make sure to consider this factor.

Certificate Deposit Accounts

Many people consider buying certificates against their savings from the bank and these certificates offer a very impressive rate of interest. However this could be a suitable option for the people who do not need their savings soon and may invest them in the longer run. Once you purchase a certificate for the deposit made you have no option of asking back for your money and it will cover the tenure in the contract and will be given back to you. These may be bought from the traditional banks or the online banks depending upon your choice and online banks offer more impressive rates.

Reasons to Open a Savings Accounts (ii)

When it comes to savings account a lot of people think about the reasons which must be compelling enough to convenience them to open up a savings account and a few such reasons may include the following:

  • The very first thing that makes sense with the savings account is the fact that you are able to save for a rainy day, in the event of an emergency you would be able to deal with the expenses on your own and nothing could be as beneficial as this thing.
  • Your habit of overspending reduces, as many people tend to spend money unnecessarily over things which are not even important and when this account has been in place the hassle of overspending eliminates because you know that you have to deposit your savings into the account.
  • A lot of people may protect themselves from debts in many cases, when you have your savings you won’t be required to take loans from banks or people and the stress of repaying debt will also not be there to cause a burden on you.
  • People who have savings account in place tend to spend their monthly expenses with a budget being defined, this way managing finances becomes much easier.

All in all the habit of savings is always the most beneficial and a perfect habit which everyone must have and among the different kinds of savings accounts people may also enjoy the benefit of no monthly fee saving accounts too if they satisfy a few conditions laid down by the banks. If you take a look at the overall benefits of the savings accounts you would be able to conclude that this has bene one of the most beneficial kind of approach which offers a lot of ease and management of finances in a fruitful way.