Savings Accounts are in place to give you a safe place to store your cash that you do not need to access frequently. They will earn an interest rate typically around 2%. Experts agree that you should try and keep 3-6 months worth of expenses in savings in case of a disaster. However, as little as $1,000 can get you out of most financial binds.
Some of the reasons you may want to consider opening a savings account are the following.
Money kept in a savings account is not as accessible as money in your checking account. Federal Law limits the amount of withdrawals you can make per month to six. However, banks will set their own soft limits of how many times you can use it. Typically 2-4 withdrawals per month after which they will charge a fee.
Annual Fees - Certain banks will charge you an annual account fee which may be waived depending on the balance of the account.
Account Minimum Balance - Similarly to above, banks may charge a fee for not maintaining an account balance above a certain amount.
Withdrawal Fee - They may charge you for withdrawing money from your account too many times in one month.
Here at The Budget Geek, we feel as though better ways to store your money exist. They have too many fees considering they are making their money by using your money. However, they are one of the safest ways to store your money.
Similar ways to save money other than a Savings Account
Money Market Account
High Interest Checking
Certificate of Deposit (CD)