If you’re earning money, you should be saving some too! Whether you’re saving up to buy a house, go on a fancy holiday or simply want to have some cash in the bank, it’s important that you have a dedicated saving account that’ll keep your hard-earned pennies safe.
Yet did you know that 11.5 million people in the UK have less than £100 in savings? So you don’t fall into that bracket, we’ve put together all you need to know about savings accounts below.
Why is opening a savings account important?
There are so many reasons why you should open a savings account. Just some of them include:
- Asset protection – Although investments like stocks and shares come with the possibility of higher returns, if you put all your money in an investment, you may end up losing wealth if you need money in an emergency. On the other hand, a savings account remains steady.
- Emergency spending – Life is full of surprises. As such, sometimes you’ll need cash readily available in case of an emergency. Whether your car breaks down, your washing machine has given up or you suddenly fall ill, a savings account can help tide you through.
- Peace of mind – If you have a good amount of money put aside in a savings account, you’ll have peace of mind that you’re prepared for the unexpected. If you’d like to sleep soundly at night, why not open a savings account and prepare for all eventualities?
- They allow you to leverage opportunities – As well as cover you for unexpected expenses, savings can also be used for more exciting things such as buying a house or going on a trip of a lifetime. You could even start up your own business with the money you’ve saved!
What are the benefits of a savings account?
- FSCS insured – In essence, this means that if your bank or building society goes under and can’t afford to pay you your money, you could get some compensation from the FSCS.
- They are low risk – As you’d expect with the name ‘savings account’, they don’t lose money! Unlike some higher-risk investing apps, your savings account balance won’t go down. This means that in a volatile market, your cash will be safe.
- They earn a return – Although savings accounts won’t give you as high of a return as investing with a UK stockbroker, they do still offer interest rates. Although you won’t make millions in a savings account, you will still get a steady and reliable income.
- Your money is readily available – Savings accounts allow you to access your money almost instantly. Investments on the other hand must be sold to release cash, which may not always be practical in the case of an emergency.
Although you might be lured in by sky-high interest rates on some of the best investments, if you’d like a safe place to keep your cash, a savings account is the way forward. If you haven’t already, why not go ahead and open a savings account to start your savings journey?