Most people shy away from saving their money in the bank because they believe banks charge high rates to keep their money safe, but they don’t know there are many benefits of saving money in the bank.
Have you ever asked yourself the real benefits of saving money in a bank account? and the reasons we are always told right from our high school days the importance of saving money in banks?
Well in this article, you are going to read the actual benefits of saving money in the bank and having a bank account.
1. Bank keeps your Money Safe
One of the greatest benefits of saving money in the bank is that banks keep your money safe all the time because banks spend millions and billions of dollars on security every single year to protect their customers’ money.
Most people deposit cash in a bank account primarily to keep their money safe because they know how difficult it is to carry cash around and how dangerous it is to keep cash in your home. A Bank makes sure there is the safety of your money because by employing various mechanisms including secure premises, vault, insurance, just to properly protect your money.
When talking about the benefits of saving money in the bank, you talk about safety from armed robbers and scammers. Even when there is a robbery or scam in the bank, it doesn’t concern you, all you know is that whenever you need your money for something, it is always safe for you to withdraw it, so you can’t lose your money.
No matter how safe you might think your home is, you will never have peace of mind when your money is in your house because you’ll always be conscious of it.
Also, if your money is safe from arm robbers in your house, is it safe from your family members or from you spending it for the wrong reasons? This is where it fails in comparison to what banks can offer when it comes to the benefits of saving money in the bank in terms of protection and safety.
Not only that, other benefits of saving money in the bank for safety is through bank insurance. Reputable banks offer their customers insurance on their money in case of loss, hacks, or any form of personal bank account scam.
Canadian banks deal with a crown corporation called the CDIC, while American banks are insured by the FDIC. You should found out the name of the corporation that handles the bank insurance in your country, but bear in mind that both the FDIC and the CDIC are not banks, they are just insurance companies.
These corporations only provide protection to customers of banks that signed up for their membership. For most of them, you sign up with their insurance policy automatically as you open your bank account. So as long as your banker is a member of the CDIC or FDIC, you will reap the benefits of saving money in the bank by making your money safe and well protected.
2. Bank offers liquidity
Banks allow you to reap the benefits of saving money in the bank by making your money liquid.
This means that it’s very easy to access your money from your bank account anytime irrespective of your location in any part of the country, even when you are outside the country.
Most major banks have branches spread out in different corners of the country and they are very easy to find, just type the name of the bank with “near me” (e.g Citibank near me) on google and the locations of the bank near you will be listed on google with even google map to help direct you to the destination.
The benefits of saving money in the bank are very obvious with savings accounts. It is a known fact that savings accounts are one of the most types of bank accounts that provide liquidity. With this bank account, your money is readily available anytime and anywhere.
If this is important to you and your business, then to reap the benefits of saving money in the bank, you have to open a savings account.
Having your money hidden in your house or tied up in cryptocurrency and high-growth stocks might sound sexy and modern, but it always takes a few days to convert into cash. So for liquidity and emergency purposes, there are a lot of benefits of saving money in the bank.
Even with the widespread of ATM machines in every corner of the street, you can easily withdraw some cash, make a transfer or deposit the cash you have from any location you are and it goes directly into your bank account within few minutes.
3. Bank helps you track your spending
One of the benefits of saving money in the bank is tracking your spending. We all know how difficult it is to track how you spend raw cash, especially when you spend a little amount of money on different things per day.
If you don’t have a good record of those small things you are spending your money on, it will eventually sum up to be a huge amount of money which will make you question where your money is going.
Keeping a record of your daily expenditures is also one of the benefits of saving money in the bank. Sometimes It’s difficult to remember whether you paid a certain bill, how much you paid for, or how much money you have left.
When you have the bank record of your expenditures, you have an accurate track of how you are spending your money, with the date, the hour, and the minutes you spent it including the name of the recipient with just the help of account statements or transaction history.
Banks keep track of all your transactions and expenses and easily having this record of your finances can help you know whether you paid a certain bill, how much you paid for, or how much money you have left by just checking the banking app on your cell phone.
It also helps you to prove that a certain transaction occurred even when the receiver denies getting the money. You can be able to prove it with your account statements, transaction history, or bank alert. But with raw cash, there is likely no trace to where the money went to, this is actually one of the important benefits of saving money in the bank.
4. It’s cheap to save your money in the Bank
Many people shy away from saving their money in the bank because they believe or the media has made them believe that saving money in the bank is quite expensive. But on the contrary, one of the benefits of saving money in the bank is because of how cheap it is to keep your money in the bank.
While saving your money in your house might sound free with no charges, but for you to properly secure your money in your house, especially if it is huge, you have to pay hundreds and thousands of dollars to special security operatives to stay around your house and guide it. Or else, there are high chances you will run the risk of your money being stolen or damaged.
But with a bank account, your money is highly secured with little or no fees, making it cheap to save your money in the bank compared to storing it at home. Most banks even offer their banking services for free which allows you to reap the benefits of saving money in the bank depending on the type of bank account you are operating as well as your age.
For instance, Canadians have five free chequing accounts that are available in the banks located in Canada. You can as well shop around the different banks in your own country, trust me, you will find a bank that can offer you what you need for free.
Opening your bank account with an account that charges a monthly fee is better. For instance, I pay $16.95 per month for my banking and I receive a lot of added benefits with my account which the value I receive outweighs the $16.95 cost I pay for the banking services.
5. You can make additional money in your bank through interest
While you won’t be wealthy from the earnings your bank offers, another way the banks allow you to reap the benefits of saving money in the bank is through a percentage monthly interest on your cash savings within your bank.
Depending on your country and global economy, banks offer interest rates that can range anywhere from 0.01% to as high rates as 3.5%.
I know it might sound small, especially if you don’t have huge money in your bank account. If that is the case and your only benefit of saving money in the bank is just to earn interest, then don’t bother opening a bank account but considering other benefits of saving money in the bank, earning interest is a nice bonus.
Whether you have your bank account with your local credit union or a national bank, most banks offer a small percentage as an interest to keep your money with them. It’s advisable to check which bank in your country has the best interest rates to grow your money over time.
NOTE: Most banks set up a limited-time interest rate as a hook to get you to open an account with them. Once the limited time is over, that interest rate will drop to whatever the nonpromotional interest rate of that particular bank is. To avoid falling into that promotional trap, make sure to properly check what the actual interest rates are.
6. Bank helps make your Savings successful
The advantage of saving money in the bank is that it enables you to easily save your money, for both long term and short term purposes without touching it before is the right time.
For instance, saving up money for trips, fund your business, or buy expensive items that you foresee buying in the immediate future. You can easily create a savings account and start saving some percentage of your paycheque till it’s complete and immediately uses the money for the purpose when the time comes.
Aside from short-term savings, the benefits of saving money in the bank are for long-term savings through fixed deposits. Most banks offer this type of savings known as fixed deposit, where you only deposit a certain amount of money per month without the bank allowing you to withdraw it till the stated date you signed for.
Most times, it takes from six months to one year or more to complete a fixed deposit circle. The advantage of fixed deposit savings is that in addition to your money you will have a high-interest rate. So check out for banks in your country to see the ones that have the best interest rate for a fixed deposit account in order to reap the benefits of saving money in the bank.
If you are planning for an emergency fund, rather than tying it up in a long-term fixed deposit account, look for savings accounts where you can easily and immediately get access to your money when you need it.
Also, one of the benefits of saving money in the bank is the use of current accounts for saving your money. Most banks are paying higher rates of interest for their current accounts right now, provided you adhere to all their terms and conditions.
If you choose to use a current account for your savings, it is advisable to open a second current account for your daily bills and expenses to avoid getting your money mixed up in one account.
As for the saving side of things, the benefits of saving money in the bank are to help lessen the temptation of touching the money in a deposit account as it earns interest as an additional income.
7. Bank makes access to loans and credit easy for existing customers
One of the benefits of saving money in the bank as an entrepreneur is to get the preferential treatments that banks usually give to their existing customers when it comes to lending money such as loans or credit.
Most banks offer their customers credit to buy a house, a car, and also for a personal loan, automobile loan, student loan, mortgage, or whatever it may be you need money for, your bank usually helps you out.
Having a bank account with a particular bank will give you a higher chance of being accepted for a loan. So for that to happen there has to be proof that you are not just a customer but a serious one. These proofs include having a good credit score and that you can handle money very well.
Aside from getting approved by your bank, one of the benefits of saving money in the bank is to improve your chances of receiving financing elsewhere. If you have a checking account or savings account, you will have a higher chance of being accepted elsewhere.
Considering the balance of those accounts, most lenders always examine your ability to pay a loan before the financing is granted. The higher your balance in those accounts, the higher your chances to be approved for financing.
As much as you think that you are the only person benefiting much from the loan because you are highly in need of the money, banks, as well other financial lenders, want the loan process to happen because the interest they make from loans and credit is one of the main revenue sources for banks and lenders.
8. Bank offers convenience
Convenience is one of the health benefits of saving money in the bank because banks reduce anxiety and stress which are the two mental health issues most people deal with, especially when it comes to personal finances.
In this modern time, the bank has become a form of convenient distribution of money. Since the money is held at the bank, you can successfully send money in real-time safely and conveniently without taking hard cash from your home to your receiver.
With technological advancements in the banking sector, One of the benefits of saving money in the bank is that you can conveniently operate your bank accounts without any stress using online banking. You can now pay your bills, transfer money, and do other things online, saving you time and money from going to the bank.
In most banks, once you sign up and create a bank account, you have access to their online banking portal and these platforms offer convenience.
Also, the benefits of saving money in the bank include having a debit card which gives you access to shop online and makes it convenient for you to buy a variety of products in any part of the world from the comfort of your home.
A debit card also enables you to have unlimited access to your account as well as using it to transact at a point-of-sale. Need to send money to a friend? E-transfer can easily do that. Paying off your Visa? Online banking can also make it happen. All these things are the benefits of saving money in the bank
9. Bank makes it easier to get paid from any part of the world
If you are an entrepreneur who receives regular payments, the benefits of saving money in the bank or opening a bank account are the ease of getting paid from any part of the world.
It is far easier to receive your payment with a bank account than it is to receive your money through other means when you are dealing with international businesses.
For instance, It is not safe for your client living in Canada to travel all the way from Canada to the United States to make payment of products and services you rendered to them.
But with a bank account, your client can just wire transfer your money from any part of the world to your bank account by just sending your account details to the person. This is one of the benefits of saving money in the bank.
10. It is easy to set up and run a bank account
Another thing that makes most people to shy away from opening a bank account is because they feel that you have to go through the hassle of setting up an account.
One of the biggest benefits of saving money in the bank as opposed to most people is how hassle-free it is to set up and run an account in the bank.
In this modern time, to open a bank account you literally don’t need to leave your house, because most banks allow all of their potential customers to sign up for their bank services and create their bank accounts online.
All you need is just an internet connection and a smart device, then search for the website of your chosen bank, fill in some of your required personal information, with an e-document to attach to the forms and you should be good to go.
Opening a bank account these days is easier because of how desperate banks are in looking for customers. They try as much as possible to eliminate any hassle that will discourage their potential customers from signing up with their bank, therefore, making the sign-up process to be very easy.
Most people prefer storing their money with a home safe, prepaid credit cards, a local storage facility, or asking a family member or a friend to help them deposit their money in their bank. All of these methods would need more effort on your end than what it takes to open a bank account to finally reap the benefits of saving money in the bank.
In summary, saving your money in the bank allows you to better manage your saving and spending habits. While earning interest from your savings in the bank is also an additional source of income that encourages people to save regularly, which is a good habit that needs to be developed from an early age.
Transaction history and bank statements also help you keep track of when and where your money was spent, which can help enable your future planning and budgeting. It also helps you to employ clever management of saving and spending which is ultimately a way to reach your financial goals.
Even when there are other places to save your money, it’s highly recommended to use the bank because of the benefits of saving money in the bank listed above.
While there are a lot of benefits of saving money in the bank, it is also important to protect your bank account from scammers, especially when making online transactions, ensure that the website you are dealing with is authentic before putting your card details and also the computer is protected by anti-virus software.
Also make sure you notify your banks immediately after your card gets lost or stolen, to enable them to disable the card and send you a replacement as soon as possible.
Bear in mind that you can change your bank and transfer all your money to the new one If you are not 100% satisfied with their services. You have a lot of options and can have different bank accounts in different banks at the same time.