Advantages of Having a Savings Account (2024)

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Establishing a savings account and developing good money habits are some of the first steps in preparing for financial goals during times of uncertainty.

Advantages of Having a Savings Account (1)

Whether you’re saving for a large purchase, vacation, or a rainy day, there are several advantages of using a savings account to build your emergency fund or goal-focused savings.

1. Provides a Secure Way to Save

Savings accounts at Huntington are FDIC insured up to applicable insurance limits. The standard insurance amount provided by the FDIC is $250,000 per depositor, per insured bank, for each account ownership category.

Huntington also takes measures to help keep the money in your savings account secure. We’re dedicated to providing a secure online banking experience. We take your privacy and security very seriously, but online threats aren’t the only concerns when it comes to account security.

We encourage you to keep your login credentials and PINs private and keep your ATM and debit cards secure. Should your card be lost or stolen, we can help. If you see unauthorized activity on your account, we can help you with disputing a debit charge.

This support, if something should go wrong, is a major benefit of having a savings account rather than keeping your savings with you as cash. Although it’s a good idea to keep some cash in a secure location at home, keeping all of your savings as cash can work against you in two main ways.

First, if the cash is lost, stolen, or destroyed in a disaster, there’s little recourse. Second, cash sitting at home isn’t earning interest. In fact, it may be losing value due to inflation.

2. Accrues Interest Over Time

Accruing interest is another benefit of savings accounts. All deposit savings accounts at Huntington are interest bearing accounts. The interest earned in deposit savings accounts is earned over time. It is compounded on a monthly or quarterly basis and then deposited into your account.

In the next cycle, you earn interest on what you’ve deposited as well as any funds that have already been credited to your account. We have a variety of savings calculators to help you see what interest can do for you and how different accounts can help you reach your financial goals. As a Huntington customer, you also have access to The Hub, our digital banking tools that can help you manage and build your savings.

Open a Huntington Savings Account

Savings accounts are great for setting aside cash for big purchases, like buying a house, or for emergency rainy day funds. You can set up scheduled transfers from your Huntington checking account to your savings account which can help you reach your savings goals even faster.

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3. Funds Are Easily Accessible

In addition to earning interest, money in a deposit savings account is readily available.

One of the biggest advantages of a savings account is that your money is fully accessible to you. You have access to your money through an ATM, online banking, our mobile app, or a transaction with a teller at one of our branches. Having instant access to your cash is what makes deposit savings accounts great for emergency savings.

This is in comparison to a CD (Certificate of Deposit). CDs can play a role in an overall savings plan, but they’re better for planned purchases than when you need quick access to the funds. With a CD, the money isn’t accessible without paying penalties until the CD matures. Deposit savings accounts don’t have maturity dates, and you have access as soon as the funds are deposited into to your account.

4. Easy to Open

You can open a savings account online in just a few minutes. It’s simple, and secure. You can also open an account at one of our branches if you prefer to speak to one of our bankers about how Huntington can help you with your financial goals.

Savings Account Considerations

Deposit savings accounts are an important part of a personal savings plan, but they don’t serve the role of a checking account, and there are other ways of building personal wealth that might be more tailored to specific goals.

Transaction Limits Exist

It’s important to remember transaction limits when evaluating the pros and cons of savings accounts. Regulation limits certain savings account withdrawals to six per statement cycle. This can make savings accounts impractical to use in day-to-day activities or to pay household bills. Checking accounts are better suited for daily expenses. Checking accounts and savings accounts differ in a variety of ways, but a big difference is that checking accounts don’t have transaction limits.

Higher Interest Options Available

Huntington offers a variety of savings accounts to help you save for life’s expected and unexpected expenses. CDs and Money Market Accounts can offer a higher interest rate than traditional deposit savings accounts, but there are additional considerations with those types of accounts. If you want to build a larger personal wealth plan, you can compare savings accounts to see which account will better serve your needs. Depending upon how much money you have to start with for your savings account, you may be able to take advantage of these higher interest rate options.

Minimum Balance Requirements

Savings accounts are not one-size-fits-all. If you’re able to maintain a higher minimum balance, you can often earn better interest rates. However, we offer interest-bearing savings accounts that don’t have minimum balance requirements too. A deposit savings account can be opened with no money and starts earning interest with balances above zero. In contrast, at Huntington, Money Market Accounts require a balance of at least $25,000 to earn interest and CD’s require $1,000 as an initial deposit.

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Federal Deposit Insurance Corporation (FDIC), “Your Insured Deposits,” Accessed May 2020.

Consumer Compliance Handbook. Federal Reserve. Regulation D1 Reserve Requirements. Accessed May 2020.

The information provided in this document is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering financial, legal, technical or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circ*mstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circ*mstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.

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Advantages of Having a Savings Account (2024)

FAQs

What is an advantage of having a savings account? ›

Savings accounts allow your money to work for you by earning interest over time and facilitating automatic bill payments, contributing to effective financial management.

What are the pros and cons of saving money? ›

Savings account benefits include safety for your savings, interest earnings and easy access to your money. However, savings accounts may have drawbacks, such as variable interest rates, minimum balance requirements and fees.

Is having a savings account worth it? ›

A savings account is a safe place to put your money when you can't afford to lose any or think you'll need it in an emergency. It's also a good place to put some of your investments as a hedge against losses – you can't lose everything if some of your money is in an ordinary savings account, after all.

What are 3 benefits advantages of saving your money at a bank? ›

Saving at a bank helps you manage your finances in a more organized and planned manner. Having a savings account lets you separate funds used for daily needs from savings funds. You can also check your savings funds' incoming and outgoing flows through neatly recorded transaction history or account mutations.

Is it smart to open a savings account? ›

But if you're looking to set aside money for future needs and goals, opening a savings account is an option to consider. Saving a percentage of your income and putting it into a savings account can help you grow your savings while building a safety net fund.

Why is a savings account more beneficial than a checking account? ›

With a savings account, you also get to enjoy the benefits of compound interest, a perk you won't get with a non-interest-bearing checking account. Once the money you deposit starts earning interest, your account balance will grow. Then you'll be earning interest on your interest—that's compound interest.

How much should you be saving? ›

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.

What is the 30 rule for savings? ›

The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).

What is a disadvantage of a savings account? ›

Low return – although consumers can earn interest, they offer relatively lower rates. Taxes – there are no tax benefits for putting money into a savings account. In fact, if a consumer accumulates a big enough balance, they will pay taxes on the interest they earn each year.

What are two pros and two cons of a savings account? ›

Three advantages of savings accounts are the potential to earn interest, it's easy to open and access, and FDIC insurance and security. Three disadvantages of savings accounts are minimum balance requirements, lower interest rates than other accounts/investments, and federal limits on saving withdrawal.

What are 3 disadvantages of saving? ›

The disadvantages of using personal savings:
  • You're limited to what you can afford: your savings may only get you so far.
  • It's risky to spend all your savings: you might need your savings for a personal emergency.
  • Your responsibility for success: having more people behind your business could lead to more success.
Mar 15, 2024

Is it better to have a checking or savings account? ›

Checking accounts are better for regular transactions such as purchases, bill payments and ATM withdrawals. They typically earn less interest — or none. Savings accounts are better for storing money. Your funds typically earn more interest.

What is the 50 30 20 rule? ›

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

How much is too much in savings? ›

So, regardless of any other factors, you generally shouldn't keep more than $250,000 in any insured deposit account.

What is an advantage of a savings account quizlet? ›

One advantage of a regular savings account is that it has high liquidity, meaning that you can get your money out easier. One disadvantage of a regular savings account is that it has low interest rates.

What are the advantages of a bank savings account Quizlet? ›

-Provide you with a safe place where you can store your money. -Savings accounts provide you with FDIC insurance. -Savings accounts allow you to earn interest. -Interest on saving account is calculated on the account's outstanding balance at end of each day.

Why would you put money in a savings account in EverFi? ›

Savings accounts can protect your money from being lost, damaged or stolen. Savings accounts help you get to your goals faster. How are simple interest and compound interest different? Compound interest stays the same over time, but simple interest grows.

What is a savings account used for in EverFi? ›

- Savings accounts are best used to store money for longer-term goals. Savings accounts allow an unlimited amount of withdrawals each month.

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