Taking control of your financial situation involves certain steps to provide a strong base for saving and growing your finances. Opening a bank savings account is the first step to creating the financial life you want. What advantages does a savings account offer?
Passive Savings Interest
A savings account is like a safer investment option that allows you to earn annual profits without actively trading or investing your funds. When you open a bank savings account and deposit money, you essentially sign up to get paid interest for keeping your money with your local credit union or bank. Of course, APRs vary by bank, but they are typically higher than national lending rates.
Wondering how this is possible?
When you deposit your money, you give the bank the right to lend it out to other customers who take loans in different forms and repay with interest. You have access to withdraw your money at any time, but you also earn interest on your available balance.
All deposits, up to $250,000, in licensed private and commercial banks are insured by the Federal Deposit Insurance Corporation (FDIC). The FDIC was created to protect consumers from liability in the event of a loss caused by theft, natural disasters, and similar events that cause banks to fail. Although it is unlikely that the more established banks may have such challenges today, the FDIC continues to ensure consumers’ deposits to protect them.
Become a Member of a Community
A bank savings account makes you part of a larger community that banks with a particular financial institution. You essentially embrace the financial performance of the institution, benefiting from its progress and services. It gets better when you have a savings account with a local credit union—you have part ownership and can vote on issues affecting the union.
Open a savings account today and begin your journey to financial growth.