For many people, their first interaction with banking came through the opening of a childhood personal savings account. Opening a savings account through a personal banking service is an excellent first step in developing financial habits that will pay excellent long-term dividends. The benefits of opening a personal savings account aren’t restricted to newcomers to banking, however. Anyone who wishes to build wealth over the long term can use a personal savings account to establish a lump sum of money that can be used in any number of ways.
There are many benefits associated with savings accounts when they’re properly managed for long-term financial growth. The first step in opening a personal savings account is finding the best personal banking service in Lake City, MI. From there, the benefits of your savings account are only limited by what you’re willing to put into it. Keep reading to learn about a few of the many perks associated with opening a personal savings account.
Grows Your Money
If you have surplus income, you may have a hard time determining what you should do with it. However, if you want a safe, stable way of coaxing financial growth from your surplus, a personal savings account offers the perfect path to that goal. While interest rates for savings accounts may seem low compared to other investment options, they’re guaranteed producers. You’ll know exactly where your money is and how much you’ll reap from your investment. Investing surplus in a savings account is much wiser than allowing those funds to sit in your checking account unused or stuffing cash into an envelope beneath your mattress.
While there are other investment options that will pay you a greater return than a savings account in the short term, those options are all tied to much greater risks. In other words, you may reap more gain from investing in other financial products, but there’ll also be a greater risk of losing money. A savings account is an extremely low-risk venture, as the money you put into it is insured by the FDIC and your stated interest rate won’t change in many cases. That means you can count on a steady return without worrying about the chance of loss.
You Retain Access to Your Money
With some forms of investment, you put money away for a specific term. During that time, it can’t be withdrawn or accessed. However, with a savings account, the money is always available to you if an emergency should arise. Most savings accounts feature no penalty for withdrawal. In fact, if you have a savings account and a checking account with the same bank, you may even be able to tie the accounts together to move money between the two accounts effortlessly. You can even set it up so that your savings account acts as a financial backstop to protect you from overdrafts on your checking account.
Storing large amounts of cash in your home or on your person can be a dangerous endeavor these days. Think of the financial frustration of saving money only to have it stolen by a burglar who broke into your house and stumbled upon your nest egg. A savings account provides you with a safe, secure way of saving your surplus income. Even if the bank is subject to a robbery, the FDIC or NCUA insures deposits made at member financial institutions.
If you have surplus income and don’t know what you should do with it, get on the path to building a brighter financial future by establishing a personal savings account. To learn more about opening a savings account, contact Forest Area Federal Credit Union at (231) 879-4154.