A savings account is a deposit account that pays you interest with no or low minimum required balance. You can open a savings account from regular banks, credit unions, mutual savings banks, and even savings accounts online.
A savings account is an account which cannot be used by writing a check or other form of money. This lets you leave your deposited money in the account until a sufficient amount has accumulated. Putting your money into saving accounts is better than stuffing your mattress or hiding it away.
How Much To Put Into Your Savings Account?
When you want to save money you must set goals. Part of setting goals is deciding just how much you can afford to put into savings. Lets say that you have just paid off one of your credit accounts. You can take that amount and begin putting it into a savings account. You know you can save this amount because you were paying it out already.
If you seriously want to save money, ING Direct has an automatic deposit feature that allows you to specify that a certain amount of money be transferred from your checking account to the money market account. I have $10 a week transferred to my money market account. What this does is take the discipline out of saving, you no longer have to manually set aside money each month, it is automatically done for you. You do need to get in the habit of having enough money in your account so you don’t get overdrawn by the automatic withdrawals.
Have A Reason To Save!!
Yes, you know you need to sock away some money but do you realize that it would be so much easier to do this if you had a reason? When you catch a vision of saving for a specific goal you will be more enthusiastic about saving. You Will be able to keep from “borrowing” from your savings account when you have a reason to watch the savings grow. Knowing exactly what you are saving for will help you to keep the vision of saving alive.
Let’s Talk About Requirements.
Some savings accounts have restrictions on the length of time they have to be kept on deposit. There are also regulations on withdrawals, transfers, and payments. Banks comply with regulations differently in regard to savings accounts. They may have different limits on withdrawals, transfer fees, monthly service charges, or payments.
How will You Know How Much You Will Save?
There is a mathematical formula for figuring out how much you will save in a given period of time. It is:
Rate = interest rate in decimal form (example 50% =.50)
You could use this formula to find out how much interest you would accumulate in 5 years but there are online calculators that can help you calculate your interest on your savings accounts. These are actually kind of fun to use as you can put in differing amounts and see just what you will have after a certain period of time.