Top 8 Benefits of a Savings Account

Savings accounts are an excellent financial decision that helps you stash away some money. These are some of their top benefits.

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Adam Moelis
Jun 7, 2022
12 min read

Historically, having a bank account was a commodity primarily enjoyed by the wealthiest aristocrats. Widespread poverty and wealth inequality kept the majority of Americans with no need to open a bank account. 

Fortunately, these issues have improved enough for the vast majority of Americans to need a place to store their assets. In 2019, the FDIC estimated that 94.6 percent of American households had at least one member with a bank account.

The internet is another key factor that has helped Americans embrace banking. Online banking has made it much easier to maintain and monitor your money. There are some options that can even offer better benefits than traditional brick-and-mortar banks

Regardless of how you’ve decided to conduct your banking, it’s a very wise decision to open up a savings account.

Why Should I Open a Savings Account?

  • It will generate interest.
  • It’s easy to open.
  • You’re less likely to spend. 
  • You can set up automatic transfers.
  • It has zero risk.
  • Your money is easily accessible.
  • It’s federally insured.

Ideally, it’s a good idea to have enough money saved up to cover at least three months of your living expenses. The problem is that nearly 40 percent of Americans don’t even have money saved up to cover a $400 emergency. If you are one of these Americans, then you should seriously consider opening up a savings account.

There are a lot of options out there for savings accounts. Make sure to do some research so you can find a savings option that will benefit you the most. If you’re still undecided on whether or not to open a savings account, here are eight reasons why you should:

It Will Generate Interest

The single biggest advantage of having a savings account is that it will generate interest over time. The bank will literally be paying you to keep your money deposited in your account.

First, the bank will give you an interest rate in the form of a percentage. During each period, they’ll multiply the contents of your savings account by this percentage. The total amount will be paid to you by the bank and is deposited directly into your account.

The exact interest rate that you’re given will depend on a few factors. Most of the large banks in America have pretty low-interest rates. You’ll need to look for savings account options that offer the largest annual percentage yield (APY). 

The higher APY that you have, the more money that you’ll make in interest.

It’s Easy To Open

There are tons of options for saving your money. Stocks, bonds, money market accounts, certificates of deposit, and individual retirement funds are just the tip of the iceberg. While these options will typically be much more lucrative long term, they’ll also be much more difficult to get involved with.

Opening a savings account will only require you to fill out a form online and make an initial deposit. That’s pretty much it. There isn’t any complicated process of creating an online trading portfolio, contacting a stockbroker, or establishing trusts. You’ll simply be opening up an account that is dedicated to your savings. 

You’re Less Likely To Spend

Having money in a checking account is the modern equivalent of having cash in your wallet. It can be hard to refrain from spending when the money is right there in your pocket. 

A savings account is an equivalent of putting that cash in a shoebox under your bed. It’s fairly difficult to spend a little extra when you’re out shopping if the money is sitting at home and safely tucked away.

A savings account functions like that metaphorical shoebox because there is no such thing as a savings account card. In fact, most banks don’t even allow you to write checks using money in your savings account. 

On the other hand, you probably have a debit card or credit card. Studies have shown that you’re way more likely to overspend by using plastic. You’ll need to transfer money from your savings to your checking before you can spend. 

Adding in this extra step can be enough of a deterrent to help you save it instead. 

You Can Set Up Automatic Transfers

Experts recommend that you save roughly 20 percent of your gross monthly income. Obviously, everyone has different circumstances in their lives, but you should aim to save something each month. Having a savings account can help you achieve this goal without even knowing it.

A very common feature that comes with a savings account is the ability to create automatic transfers. You can set up daily, weekly, or monthly transfers for as much money as you like. The money will be automatically transferred from your checking account and deposited safely in your savings.

It Has Zero Risk

It’s virtually impossible for your savings account to lose your money. The only way that you’ll have less money in your savings tomorrow is if you make a withdrawal today. On the other hand, a lot of investments will come with substantial risks. 

The stock market is notoriously flakey, and there have been several enormous fluctuations in the last few decades. The Dow Jones Industrial Average (DJIA)  fell by 777 points on September 29, 2008, during the height of the Great Recession. 

At the time, it was the single largest point drop in history. Twelve years later, a new record would be set on March 16, 2020, when the DJIA dropped 2,997 points.

Every point dropped on those two days is the equivalent of one dollar in value lost. Needless to say, there were a lot of people who lost a lot of money during each of those falls. Do you know how much the average savings account lost on each of these days? Not a single cent.

It (Probably) Won’t Come With Fees

There isn’t much to lose by trying out something that’s free. Since the vast majority of savings accounts come free of charge, there's no reason for you to miss out on having one. The only thing is that you’ll need to make sure and read the fine print. Technically, there are monthly fees charged by banks to maintain your savings account. However, these fees are very commonly waived as long as you qualify.

Most of the qualifications revolve around maintaining a minimum balance or establishing recurring deposits. None of the requirements is anything too outrageous or difficult. Before you open the account, make sure that you understand what you’ll need to do to have the fees waived.

Your Money Is Easily Accessible

The good thing about saving money is that it’s always there when you need it. The problem is that it’s very difficult to secure your money with a lot of savings options. Take the 401(k) retirement account, for example. 

You can be heavily penalized for withdrawing cash from this account before a certain age. Even though it’s technically your money, you can’t withdraw it until you’re at least 55 years old

A standard savings account doesn’t have this problem. You can withdraw or transfer 24 hours a day, no matter how old you are. If times are tough and you need to dip into savings, it’s just a few clicks away. That’s not the case for certain savings options that require the account to mature first.

It’s Federally Insured 

There are a lot of risks that come with keeping your money in cash. A natural disaster or a thief could wipe out all of your savings in the blink of an eye. There is no such issue when it comes to your savings account. Every cent is protected and secured. 

Pretty much all savings accounts these days are federally insured by the Federal Deposit Insurance Corporation (FDIC). The maximum insurable amount for each account is $250,000. If anything were to ever happen to your money while it was under the protection of the bank, then you would be compensated by the FDIC.

Another Way To Save

It’s pretty clear that creating a savings account will come with a lot of benefits. There aren’t really any downsides that will come with one. You can separate your money, make interest off it, maintain easy access, and have no risk associated with it. 

Before you open up a savings account with your local bank, you should consider using Yotta instead. All that you have to do is deposit some money in your Yotta account, and you’ll have the chance to win a $10 million cash prize or a brand new Tesla Model 3. There are no banks in the country that will give you anything close to benefits like that.

The way that it works is pretty simple. You’ll be given one ticket for every $25 in your account. Each ticket will contain six numbers and a Yotta Ball. A new number is drawn each night at 9 PM EST, with the final one being the Yotta Ball. 

Depending on how many of your numbers match, you could win a series of cash prizes that includes a $10 million jackpot. 

Visit Yotta today so that you can enter into the next drawing. Remember that the more money that you save, the better odds you’ll have of winning the jackpot. You won’t find a better incentive to save anywhere else. 

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