The Importance of Saving / By: Janel Ray

A savings account is used to store money, earn interest, and save toward a goal. A savings account can be beneficial in many ways. This article will highlight what a savings account is and why it is incredibly important, especially for young people. Most people know the importance of a checking account. However, when you open a savings account at a financial institution, it offers additional advantages. Checking accounts allow you to pay bills and get cash when you need it. However, a savings account can help you save for a long term goal, like buying a car or college expenses, by providing a place for your money that earns a higher interest rate while still being accessible. According to Comerica Bank,  “ A savings account is an effective way to store your money in a secure location where it can earn interest” ( Comerica, 2023 ). Regina Keel, Bed Bath & Beyond employee, explains why she started using a savings account. “ Saving is important because you never know when you need money put aside for emergencies. A saving account can help you keep your daily purchases separate from your future savings ”.  “Two-thirds (66%) of Americans reported being able to save money in the past year, with increased interest rates (50%) and pay increases (35%) being the most common factors that helped them save”  ( Horton, 2023 ).  Typically, the bank gives you a small percentage for keeping your savings account stashed away. The more you save and do not touch your money, the more interest you will earn. This is why it is incredibly important to start saving early! “ Money in a savings account typically grows as a result of compound interest . With compound interest, you earn interest on the money you put into the account and on the interest you’ve already earned”  (Sharkey, 2023). Be sure to shop around to get the best annual percentage rate available. Alberto Roman, a representative of Great Lakes Credit Union, says, “ A savings account is something, in my opinion, that most people do not use or know how to use. It is important and beneficial because a savings account and good savings habits allow you to put money away for upcoming expenses. Additionally, a savings account is your financial bedrock to help manage and grow your funds. It is one of the simplest ways you can grow your funds, besides investing.” Work Cited: Advantages of a savings account: Security, access and more. (n.d.). https://www.comerica.com/insights/personal-finance/advantages-of-a-savings-account-security-access-and-more.html   Horton, C. (2023, May 22). 48% of Americans are maximizing their savings through a high-yield savings account . Forbes. https://www.forbes.com/advisor/banking/savings/us-savings-rate-2023-survey/   Sharkey, S. (2023, February 8). 5 benefits of a savings account . Intuit Credit Karma. https://www.creditkarma.com/savings/i/benefits-of-savings-account