SavingsAccounts

Regular Savings Accounts

Regular savings accounts are a great way to start earning some interest on money that you can't quite deposit in long-term investments, but you want to put it somewhere other than your checking account. Perhaps you don't have quite what you need to open a mutual fund or IRA, but, you have a little bit extra that you might not need for awhile. Putting it into regular savings accounts will allow it to grow as you decide what to do with it. You may need it at some point for an unforeseen emergency, or you might just want to continue to grow it into a future investment, such as a money market, or some of the others that require minimum deposits.

In order to understand exactly what regular savings accounts can do for you, you need to understand exactly what it is. A regular savings account is a bank account, or an account set up with your credit union, which pays a rate on your deposits, and allows you to withdraw whatever amount of your money you need at any time. There are no penalties for withdrawal, unlike a Certificate of Deposit.

Managing Your Regular Savings Account

You can open your accounts at the same bank where you have your checking account, and you can have them connected so that you can access your bank savings account for better protection against overdrafts.

Having your accounts at the same bank allows you to be able to access both electronically and transfer funds between the two as necessary. You're probably familiar with the tellers, bank officials and the policies and procedures so it won't require learning something new.

It's easy to manage and you can open it, and start earning, as soon as you have the extra cash to deposit. There's really not much else to managing your regular savings accounts than that. You'll want to investigate opportunities for higher rates and determine what type of regular savings rate is right for you.

Some regular savings accounts require you to maintain a minimum balance in order to obtain a high rate. If you think you may be needing to withdraw some money, you might want to go with one that requires no minimum balance as you can find your reserves eaten up fairly quickly if you drop below the minimum balance too often. The regular savings accounts that don't require minimum balances often don't have the higher yield, however they will provide a consistent rate.

By opening one of the regular savings accounts, you'll be able to build your money over time. If you can leave it alone for awhile, you'll be amazed and surprised by the rate at which your money compounds. At that point you can decide to transfer it into a higher-yielding investment, such as a CD or IRA, or splurge a bit and take a much dreamed about vacation, or make that major purchase you've been putting off such as a new car. That's one of the many benefits of saving your money!

Credit Unions

Credit unions can also offer you regular savings accounts. Credit unions have all the benefits of banks with the added advantage of being a member, or part owner, and enjoying the perks you get with that distinction. Credit unions generally offer higher rates for saving accounts and cd's, and lower rates on mortgages and auto loans. While your money is insured through the FDIC when you make a deposit in a bank, credit unions have the NCUA to protect your deposits to your regular accounts. Both protect up to $250.000.00.

The disadvantages to credit unions can be a problem for some. Most credit unions aren't open during convenient hours, and certainly not as frequently as banks. Some credit unions have few branches and you may find your credit union is inconveniently located. Often, however, credit unions operate through a network and you may be able to make transactions at another credit union than your own.

When to Start Savings Accounts

No matter what the goal for your money, whether it be a down payment on a home, paying off your student loans, or saving for retirement, a regular savings plan is a wonderful way to begin. Many parents open a these types of regular accounts when their children are very small. It can help teach children the importance of good money management.

As adults, we may not always have enough to open a Roth IRA or similar long term investment. This is a great way to discipline yourself and earn some interest as you go. It may just be a smart place to put your money in order to keep it liquid but also let it work for you. Whatever your reasons, opening regular savings accounts is a step in the right direction for your fiscal health.