A savings strategy is important for any financial plan, but some people will dump all of their money into one account when it comes to where to park your savings.
This strategy can work, and it does for a lot of people, but one thing you might also consider is having different savings accounts for different purposes that will only help you hit your financial goals.
There is no overnight solution to getting good with money. You can explore the options available before you open a savings account online because being strategic is one of the simplest steps you can take towards creating a life that is holistically better with money— one that’s more secure, predictable, and most importantly, under your control.
Now the question arises, which is the best type of savings account that will suit your financial requirements. To clear the air of confusion, let us have a look at the different options available just so that you can make smart savings choices.
Different Types of Savings Accounts.
Immediate Saving Account.
Exploring the different types of savings accounts in their relative order of importance, the first type that comes to mind is a savings account that everyone should have for their every day or immediate savings.
Perhaps it is very likely for you to already have one. This is nothing more than a regular savings account that you will open up either at your bank or a credit union in your area.
The whole purpose of having this account is for you to know that when the need arises, you can easily go to the bank, withdraw money and you do not have to use a credit card which means you avoid debt and you also avoid paying interest.
The only negative aspect of a regular savings account is that it does not earn much interest. However, the sole purpose of a savings account is to make sure you always have cash available for immediate purposes and emergencies.
High-yield Saving Account.
The second type of savings account is the high-yield savings account. Additionally, if you open a savings account online, it earns a much higher interest rate than what you are going to receive at a regular bank.
Another reason why it is a good idea to keep most of your savings in an online account is that these accounts are less accessible— a great way to deal with impulse control and avoid unnecessary spending on your finances. This further allows you to save more money.
Goals Saving Account.
The third type alludes to having goals saving account. This is an account where you can keep the money that you are saving for a specific goal such as wedding expenses, the down payment on a house, educational funding, and so on.
When you are saving for multiple goals at the same time, there is a high possibility of losing track of how much you have saved for each special goal. Thus, when it comes to your goal account, it is highly recommended that have a different account for each goal.
Another reason why it is a good idea to have separate goals account for different goals is due to the fact that many banks will give you the option of naming your accounts which apparently helps you with the savings effort and staying more focused.
Automatic Savings Account.
The last type of savings account is an automatic savings service that is going to put your savings on autopilot. This way, you can save little every day and inculcate the golden habit of saving your finances. It allows you to step up your savings effortlessly.
If you are going to park your cash and you want it to be liquid somewhere, you do not want it to be simply sitting in your bedroom or under your pillow or mattress because that is technically not going to serve you any good.
You can instead open a savings account online. A lot of savings account, the SBI savings account allows you to easily open a savings account online without any charges. You can own multiple savings account, and you don’t need to pay additional charges to open one.
Whether you decide to have separate savings account for separate specific goals or you wish to pool all the money into a single savings account, it is highly recommended that you open savings account online as this will help you to earn a higher interest rate and again, the money is not as accessible that will further allow you to save more.