• What is a savings account?

    • A savings account is an interest-bearing account offered by banks or financial institutions for you to deposit money you do not intend to use daily; compare this to checking accounts which are intended for daily use and do not have an interest rate.  Some banks limit the amount of withdrawals from a savings account and/or have a minimum amount you must keep in your savings account.

    • Online savings accounts have better interest rates than those from traditional brick and mortar banks (i.e. physical banks, because they have to actually pay for things like rent and utilities). Online savings accounts have interest rates of 1.85% - 1.95%. Traditional banks have interest rates of 0.01%-0.05%. However, the goal is to store money, not become a millionaire off these interest rates.

    • They are very liquid, meaning very available for use. This can be both an advantage and disadvantage. If you needed to access money for an emergency repair you would be able to do so without penalty, however because it is so accessible, it may be tempting to use.

    • Savings accounts are insured by the government (Federal Deposit Insurance Corporation aka FDIC) up to $250,000.

2018. by Christie Ton with wix.com

Dr. Piggy Bank

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