The Advantages of Savings Accounts

The 2014 Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling revealed that 66 percent of adults keep non-retirement savings. However, the same survey revealed 16 percent of adults worry about their emergency cash stash and having enough money for retirement.

Merely keeping a savings account encourages a new level of financial security. Here are three financial advantages to maintaining a savings account.

1. Creates the Habit

The existence of a savings account alone can help create a saving habit. Banks will often make it easy with low opening balances and waive maintenance fees if you keep the balance at a certain level. With basic accounts, this required minimum balance to avoid fees can be as low as $100—an amount easy to maintain.

The habit is essential to maintaining this element of financial security. Even though people are starting to save more, 44 percent of households are considered liquid asset poor, meaning they hold less than three months' expenses worth of savings. Having some nebulous definition of an acceptable checking account balance or even just stuffing cash into a mattress does not promote the same financial awareness as seeing your savings balance alongside your checking balance every time to perform online banking.

2. Automatic Deposits

You do not have to rely on self discipline alone. Just as you can arrange direct deposit into your checking account, you can have part of your paycheck go into savings too. Making this automatic means the money hits your account before you have a chance to fail in the delayed gratification department.

If your employer cannot split your check that way, you can arrange for automatic transfers between your checking and savings account. If you have trouble saving money, automation may be an effective tool for you.

3. Access in Case of Emergency

It is often argued that savings accounts need to be difficult to access. Unfortunately, if you are stranded at a car repair shop out of town and need funds quick, this barrier to enforce self discipline may leave you stuck longer.

Since an emergency fund offers no benefits unless it is accessible, place that money in a general savings account that allows quick money transfers when challenging circumstances arise. You can still control your access by implementing two ground rules:

• Decide on a specific definition of an emergency. Limit the use of the funds to truly challenging events like a leaking roof or a broken down car. Wanting pizza for dinner one night is not an emergency.

•  See the minimum amount to avoid fees as an advantage. Knowing that you must keep $100 in savings or face a $3.00 a month fee means a reduced likelihood of spending down savings for frivolous reasons.

 Savings accounts are a great start to developing good financial habits. With the many options available, it is easy to find the best account to suit your needs.