Opening up a savings account? Read this!

Why should you open up a savings account?

No matter how much money you earn, there are many reasons to save money every month, including:

  • Buying things you want without going into debt. Most of us love nice things, such as watches, clothes, cars, holidays, TVS, etc. and, although it’s so easy to buy these things on credit, this can cause you to rack up a lot of debt. Saving for things you want is always a safer, more rewarding route to take.  
  • Financial independence. Whether you open a savings, notice account or retirement fund, the best advantage of saving is the financial independence it gives for you. Having a buffer of money available comes in handy, especially in the case of an emergency.
  • Growing your money. Investing your money helps it grow. If you earn compound interest on your invested savings, your money will increase continuously.

Here are a few important questions to ask when opening up a savings account with a bank:

  1. How much does it cost to open up a savings account? Most banks won’t charge you for opening up a savings account but they often charge monthly or annual maintenance fees and require a minimum opening deposit. Make sure you don’t end up paying high fees as the purpose of a savings account is to save as much money as possible.
  2. How much interest will you earn? Make sure you earn interest on the money you keep in your savings account. You will usually receive a percentage of the money that is currently in your savings account.
  3. Is there a minimum balance requirement? Banks may have a minimum balance requirement; however, you should always aim to have as much money as possible in the account as this will earn you higher interest on your savings.
  4. Does the bank offer online banking? Before you open up an account, make sure the bank you choose provides online banking services and a banking app so that you can check and manage your account easily.
  5. What type of savings accounts do they offer?  Find out what type of savings accounts are available. You need to open up an account that’s best for you.

Whatever type of savings account you choose to open, just know that by opening up an account, you are doing yourself a huge favour. If you are battling to keep up to date with your monthly expenses and unable to save money, you may benefit from debt counselling.

Contact Debt Rescue to find out more.

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