Saving for your future is important; however, contributing to an employee retirement account isn’t the only way to do it. While 401(k)s and other similar retirement funds are helpful, you should consider other ways to invest in your future as well. Although you can invest in stocks or bonds, those do carry some risk. If you’re looking for a long-term investment that’s risk-free, then you should open up a savings account. A savings account may not be the most exciting investment, but it’s certainly one of the most sound.
What are the Benefits of Opening a Savings Account?
- There’s less financial risk – Savings accounts are insured by the FDIC (Federal Deposit Insurance Corporation). Additionally, unlike other investments, savings accounts aren’t affected by the market. Investing in a savings account can be one of the safest ways to save.
- You can earn money – The more money you put into your savings account and the longer it remains there, the bigger a return you can earn. The return is generally less than two percent, but considering that there’s little risk of losing money, it’s a solid return.
- You can always access your money – Many other types of investments will penalize you for taking money out of it before a certain amount of time passes. This can be problematic if you were to ever find yourself facing a financial emergency. Fortunately, if you have a savings account, then you can withdraw money at any time you want without being penalized.
Do You Want More Than a Regular Savings Account?
If you’re looking for another way to save money for your future that can maybe provide a bigger return, you may want to consider a money market option. Money market accounts are very similar to savings accounts. Like savings accounts, money markets are also FDIC-insured. However, they tend to have a higher interest rate, which means you could earn more. They are also easier to withdraw money from when you need it. The only drawback is that most money market accounts require a minimum balance. If your balance dips below the minimum, you may be charged a penalty.
If you’re looking for ways to invest and save for your future without risk, then you can’t go wrong with either a savings account or a money market account. Find out how you can open up a savings account at a community bank by contacting us at Providence Bank today.