When you have a savings account, you are getting the security and safety you need without any possible risks to your money. Not many people know its advantages, take a look below at why a savings account is so important to you.
What is a savings account?
This is one of the easiest and risk-free investments you can do with your money; you basically deposit all your extra or unused cash in a bank account. A savings account does come with a drawback that it gives only limited interest, and the rate is different in each bank worldwide. So if you’re living in Norway for example, a country famous for its wealth and financial stability, opening up a sparekonto there would give you a 1.93% interest rate. It might be low, but it comes with no risk at all, which acts as a major benefit in today’s world as you are earning money with no danger or doubts involved.
It gains interest overtime
Instead of keeping your money under the carpet in your home, you can actually increase it by doing nothing. Depositing in a savings account will give you returns, even if it’s low; you have more earning potential and it’s better than nothing at all.
It’s the safest place for your money
With investing your money this way, you are gaining a lot of security for your money. Imagine what could happen if you just keep it at home, as possible robberies or accidents could make you lose it. But with most banks around the world having your money insured, the possibility of any disaster or theft is minimal, making your money in the safest place ever at the bank.
Not a lot of money? no problem
A lot of these accounts can be started for just 25 dollars, for example. Some banks worldwide may have an even lower limit. When you open an account and have it saved a very little amount of money, this allows you to begin saving it, even if you don’t have much to save in the first place.
The money saved for emergencies
Since you don’t really use the money in that account, and it’s just stored away at the bank, you have a source to go to when you’re in trouble, whether you lost your job, had an accident, or need extra money for sudden medical treatments. The phrase “Saving it for a rainy day” really shows meaning in situations like these.
It can be linked with your checking account
The great service that most banks offer with these types of accounts is the convenience you have with your checking account for example. In the days when you’re running low on funds, you can transfer some of the funds from your savings account there with ease, saving you in tight situations like incurring overdraft charges.
When you’re searching for an investment, a savings account is the safest thing to go for with minimal drawbacks and no risks at all. Utilize your unused cash in a better and lucrative way instead of keeping it at home.
Saving is just one of the money hacks that helps you get your life balance. There are other multiple things you need to observe to live a stress-free life. Here is a financial guide for those just moving in Malaysia.