Opening a savings account can be a great idea for some consumers, but it may not be the right choice for all consumers. For those who are new to banking services, a savings account is not the same as a checking account. They share some similarities, but they are different in terms and conditions.
In terms, a savings account is a type of account that you can open at a bank or credit union. With this type of account, you deposit money into the account and leave it there for it to earn interest. You can take the money out of the savings account, but that defeats the purpose.
A savings account is a great way for some people to save money and to earn some interest from that money. It is especially useful for those individuals who have limited amounts of cash to put away. Young people, especially younger married couples, often find that opening a savings account is the best way for them to save money. The reason for this is simple. Unlike some other types of investments which always demand a certain amount of money be deposited or maintained, a simple savings account allows you to deposit whatever you like, whenever you like.
Another reason a savings account is handy for those with limited funds is that the money you deposit into the account can be withdrawn immediately if you need to get it. Again, some other types of savings or investments instruments are not this fluid. Most savings accounts allow you to use the ATM as well, which offers even greater access to your money should an emergency arise. This is simply not the case with other types of accounts such as certificates of deposit or money market accounts.
Savings accounts are also safe for your money in two ways. No one should keep large amounts of cash at home; that is simply dangerous to do. The money could be stolen or if there were a fire, the cash could be destroyed. In both cases, you would completely lose your money with (probably) no way of getting it back.
The second safety feature that savings accounts have is that money that is deposited in a bank is protected by local government Insurance Corporations. If the bank is robbed or the bank burns down, you will still have your money. Even if the bank files bankruptcy, your money is safe.
And when you are ready to open a savings account do some research first. You want to find out which banks are offering the best interest rates available in the market.