Savings Accounts: Pros and Cons

You may have been putting money into a savings account for years without thinking about the benefits and drawbacks of keeping your money in the bank. When it comes to your money, you should be fully aware of your choices and you should understand the pros and cons of savings accounts.

Benefits

*All banks and credit unions carry insurance; this means that whatever money you deposit is secure. No matter what happens with the bank, you'll get all your money back.

*You can choose to open a savings account that doesn't come with a debit card, which makes the withdrawal of money harder. After all, you're there to save!

*You can also choose to set up automatic deposits and payments to manage your account; your payroll money can be directly deposited. That's one less thing to worry about each month!

Drawbacks

*Most banks require that you keep a minimum balance to keep from being charged fees. At some banks, you will only have to pay $25, but some can require as much as $1,000 to keep the account in good standing. Like anything else, you'll want to shop around for an account that meets your needs.

*Savings accounts typically come with the lowest interest rates out of any place that you can put your money (other than a checking account, that is). If you want your money to make you money, then a savings account is not your best option.

Savings accounts have a lot of benefits, but they are not without their disadvantages. By carefully comparing the pros and cons of savings accounts, you will be able to arrive at a more informed decision.