Savings Account
A savings account helps consumers save their assets to use them in the future.
Many banks offer the service of savings accounts to their customers.
Credit unions provide savings accounts as well and call them to share accounts.
Benefits
Many people wonder why they should use a savings account. In fact, a savings account is very beneficial for customers. People having savings accounts can earn high-interest rates on the deposits. People who don’t have a need for their money currently but want to have them liquid can deposit the funds in a savings account. As soon as the money has been deposited they start earning interest.
Restrictions
Savings accounts may have some restrictions.
For instance, transfers out of a savings account are restricted, thus holders are allowed to make 6 transfers every month. Those who violate the restriction may be fined or savings account might be changed into a checking account.
Some banks limit the number of withdrawals holders can perform from their savings account. The limits are stipulated in the account agreement. Holders are to read carefully the agreement before creating a savings account in a bank.
Automated withdrawals from a savings account (e.g. through ACH) are not allowed. Generally, the clients pay bills online using a bill payment program offered by a company or the bank. Utility companies and credit card companies accept banking payments online. Clients making payments through an automated transfer method will have the payment rejected. Such actions can lead to the savings account changing into a checking one.
Features
Typically savings accounts may have several service fees. Some banks set a fee to create a new savings account and deposit funds into it. Banks often charge a fee for maintaining the account to people who fail to maintain a minimum balance.
Read over the agreement to clearly understand the terms.
Some banks may charge a fee for the holders to perform withdrawals at ATM machines or interact with tellers. All the fees are stipulated in the account agreement.
Online savings accounts are full of benefits in comparison with savings accounts provided by traditional banks.
Online banks offer high rates of interest on savings accounts because of their low overhead costing. It is easy to open an online savings account. Any person having a valid number of social security and ready to provide some other personal data can become a holder of a savings account. In most cases, no limits are set to the minimum account balance for online savings accounts.
A savings account is a perfect way to regulate your liquid assets.
Many people want to save a particular sum from the paycheck. Besides, savings accounts may serve a good emergency fund for example if a person loses his/her job or needs a large sum fast. Saving account is one of the requirements to applicants for payday loans. All in all, a savings account helps people balance their financial life and plan the budget properly.