How to open Savings Bank Account
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What is a savings account?👇👇
A savings
account is a basic type of financial product that allows you to deposit your
money and typically earn a modest amount of interest. You can find savings
accounts at banks and credit unions. You don’t need a large amount of money to
open a savings account, and you also have easy access to your money.
Why you need a
savings account
A savings account is a good place
to keep money for a later date, separate from everyday spending cash, because
of their safety, reliability and liquidity. These accounts are a great place
for your emergency fund or savings for shorter-term goals, like a vacation or
home repair.
Beyond quick access to your cash
when you need it, savings accounts often offer higher interest rates than
checking accounts. You might even find some savings accounts with a higher APY
than money market accounts. The average APY on savings accounts is just 0.06
percent, but you can find high-yield savings accounts paying around 0.6
percent.
Finally, there are many
opportunities to open a savings account with low fees. You can often find
simple options to avoid pesky maintenance fees.
How does a
savings account work?
You will open a savings account at
a bank or credit union, either online or in person. The process is similar to
opening a checking account. You will provide the institution with personal
information and then deposit money into the account.
Once you’ve made a deposit, the
money in your savings account will begin to earn interest. The amount you earn
will depend on a few factors, including your savings account APY, the amount of
money you deposit and how long you keep money in your account.
Your bank may choose to compound
interest on a daily, monthly, quarterly or yearly basis. At the end of each compounding
period, your accrued interest is deposited into your account. From there, your
new account balance (deposits plus interest) will begin earning interest.
Your savings account APY is variable and can change at any
time. You can move money out of the account whenever you want, but Regulation D
limits the amount of times you can do so to six per month.
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