How do Savings Accounts Work?
Review savings account types and the best ways to use them
If you're relatively new to banking or just want to brush up on your saving options, you may have some basic questions about savings accounts. After all, there are a variety of accounts you can open for different purposes. Let's start with some fundamental savings account information to get you familiar with these accounts:
- Savings accounts pay you interest on the money you keep in them.
- They are FDIC-insured.
- You can access the funds in your savings account easily by transferring the money into checking or withdrawing it directly.
- You can easily deposit money into your savings account utilizing manual or automatic transfers from your checking account, paycheck or other sources.
Savings account types to consider
So, knowing that savings accounts are very low-risk ways to grow your money, you may be interested in opening one. The question now becomes which type of savings account is best for you. Many institutions will offer several account options that have different features, so you'll want to learn how to compare them.
Here are some things to consider:
- Is there an annual fee? Some savings accounts have fees while others won't, particularly if you can maintain a minimum balance in the account or set up automatic transfers from your checking account.
- What is the minimum balance? You may find higher interest rates on accounts that require you to keep more money in them.
- Are there incentives to save? You may get cash rewards or other perks if you set a savings goal and meet it.
- Will you pay transaction fees? Be sure you understand any fees you'll be charged for transferring funds between accounts.
When to open a savings account
You can't go wrong if you get into the habit of saving early and often. Even if you're only saving a few dollars each week, it will add up over the long term. So, when you open your checking account, also open a savings account. You can even set up automatic transfers so that you don't have to think about saving. Start with as little as $20 per month or be more aggressive and move a percentage of each paycheck. Find an amount that works for you and your budget to start building your savings.
Also, you might want to consider opening a different savings account for each savings goal you have. For example, if you want to build an emergency fund, save for vacation, and save up for entertainment expenses like a new TV, split those into three separate savings accounts so you can easily keep the money separate and track your progress.
Start saving with Citizens Bank
Opening a savings account with Citizens Bank is fast and simple and can help you be more responsible with your money. Choose among our various savings accounts to find the one that best fits your needs. If you'd like more savings account information, you can contact a Citizens Bank customer care representative at 1-877-360-2472.