Top Reasons to Open a Savings Account

If you’re just starting out, starting over, or are somewhere in between, it’s important to include saving for the future as part of your overall financial plan. Designed to safeguard your money until you need it, a savings account is a secure place to deposit your money while building up your savings over time.
 

Should I Have a Savings Account?

If you have a checking account and are just depositing all your money into it, you may be considering if you should also have a savings account? When you consider the benefits, there are many reasons to have a savings account.

Find out more by reading, “Which Kind of Savings Account or Solution is Best For My Needs?”

Unlike a checking account, which is typically designed to be the account that your paychecks are deposited into, is synced with your debit card for transactions and everyday bills, and ideally has enough to fund one to two months of expenses, a savings account serves a longer-term purpose. Savings accounts are used to store money in to save for things like an emergency expense, a wedding, college books, or even a down payment on a new home.

What are the advantages of opening a savings account? 

1. Grows securely. It can be beneficial to open a savings account with a trusted financial services provider, like First Bank, that offers both in-person and online banking options. Plus, you can rest easy knowing your deposits at First Bank are insured by the Federal Deposit Insurance Corporation (FDIC). Find out more about FDIC Insurance.
2. Remains accessible. Unlike retirement savings, a traditional savings account offers you the ability to access your money when you need it. Plus, you can move money easily into and out of your account by using First Bank’s free eBanking and Mobile Banking.
3. Earns interest. You’ll want to find the right savings account for your specific needs. By earning a competitive, variable interest rate, and continuing to make regular deposits each pay period, you can build up your savings account over time.
4. Keeps your finances on track. As you continue to add to your savings, the amount builds up. Knowing you have a secure savings account to tap into helps hedge against turning to high interest debt, having access to funds when an opportunity arises, as well as gaining peace-of-mind should an emergency expense or job/income loss occur. It’s recommended to keep three to six months of monthly expenses in a secure savings account.

 

Are There Downsides to Not Having a Savings Account?

A survey conducted by Bankrate in December 2023 found that only 44% of Americans have enough in a savings account to cover an unplanned expense, such a car repair or a medical bill, of $1,000¹. That means nearly half of Americans would need to turn to another source to cover this unexpected expense. Not having a funded savings account often means relying on other unfavorable sources for money when needed, like credit cards, high-interest payday loans, retirement funds, or even borrowing from family members.

Another downside is missing out on potential compound growth opportunities for long-term wealth building.
Get started today by opening a savings account that offers a competitive interest rate, grows securely, is easily accessible, and helps keep your financial journey on track!

Find out more about a savings account in MO, IL, or CA from First Bank.