What is savings account?
A savings account is an account for storing money while you earn some interest from it.
But how much interest do I make from a savings account?
It changes from time to time, but in 2018, it is 0.1% – 1.5% per year depending on the bank.
That’s really low interest… So what’s the point of having a savings account?
Well, first of all, your money is absolutely safe and can be stored for short to medium term goals, like a down payment for a house or a car, or it can be used for an emergency fund.
Can I deposit money from my piggy bank in a savings account?
Yes, you can – it would be a lot safer there, and it would earn some interest.
How many savings accounts can I have?
Well, you can have any number you want!
Can I move money from one savings account to another savings account, or even to a checking account?
Yes, you can do that. But usually, there is a restriction on the number of times that can be done in a month.
Who should have a savings account?
Well, anyone who is saving for short to medium term goals and needs a safe way to earn some interest. And anyone that’s also building an emergency fund.
Is there any fee associated with a savings account?
Yes, most banks have $5-$10 monthly fee. But that can be waived if a minimum balance is maintained. Depending on the bank, the minimum balance is usually $300-$500.
The fee could also be waived if the savings account is linked to a checking account.
But how do I open a savings account?
It’s very easy to open a savings account. You can do it by visiting the bank’s branch, or you can do it online. You just need your social security number and a photo ID, like your driver’s license.
But how do I choose a savings account? Like, are some better than others?
You should pick a bank that is FDIC insured, just for safety. And you should also look for high interest. And also if you can, choose a savings account with no monthly fees.
Whoa… That’s a lot about a savings account! Thank you very much for telling me what a savings account is.
You’re welcome Sooper Cooper. Remember, finance is your friend!
Podcast: What is a Savings Account
Everything you need to know about a bank savings account: what is a savings account, how much interest do you get in a savings account, why should you have a savings account, how many savings accounts can you have, can you transfer money from one savings account to another or to a checking account, who should have a savings account, what is the fee for a savings account, how do you open a savings account, how do you choose a savings account, and more.
Show notes and transcript at: What is a Savings Account