When most people refer to investing, things that usually come to mind are bonds, stocks and real estate. An ordinary savings account is not something many people associate with investing. These types of investment opportunities can offer investors great long-term returns on their investments. However, they can all come with disadvantages and risks. Because of that, it is not the ideal way to save or invest hard-earned money for a lot of people. On the other side of the investing spectrum are simple savings accounts. They aren’t glamorous or going to offer high yields for investors. They do have their own benefits to be considered, however. Below are some of the top reasons you should consider opening up a savings account with a reputable bank such as the one found at www.gobankingrates.com.
Insured By The FDIC
When you invest your hard-earned money into something, you want to rest assured that if something goes wrong with the institution, you aren’t going to lose all of your money. When it comes to investing in savings accounts, your money will be FDIC-insured for up to $250,000. If the bank you have an account with goes out of business, your money is going to be safe. Depending on the situation, you will get paid the amount directly or a new account will be opened up for you at a new bank for the same amount. Other types of investments cannot offer this same protection. If you own stock in a company that ends up going out of business, you lose your money. Simply put, you will not have any risk of losing your money when you choose to invest with savings accounts.
By their true nature, savings accounts have practically zero risks. You will never end up with less money than you put in. In other types of investment opportunities, you could end up losing all the money you put in and the interest you earned. With this type of account, your balance will never go down. It can only go up unless you decide to take out some money. If you cannot afford to lose your money, savings accounts are the best place to put it because they are safe from market volatility.
Money Is Always Available
With some investment opportunities, once you hand over your money, there is no getting it back any time soon. When you own savings accounts, you have access to the account whenever you need. If you have an emergency and need to get money from your account, you can do so right at your bank’s ATM. Other types of investments that promote being “liquid” can sometimes take days or weeks to get funds out of. On the other side of the spectrum, investing in something such as real estate could take months or many years to liquidate. A savings account makes for a great emergency fund that can earn you a little interest while you are not using the funds.
These are just a few of the benefits of opening up a savings account when you are looking to invest your money. If you are new to investing and want to keep your risks low, this is the best way to get started without worrying about losing your money.