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The Importance of Managing Money

Introduction > Take the Test > Where Do You Get Your Money? > How To Handle Money > Budgeting and Saving > Conclusion

How To Handle Money > Checking Accounts > Saving Accounts > How to Open a Bank Account > Cash or Credit? > Advantages and Disadvantages of Credit > How to Open/Apply for an Account

Saving Accounts

Some people open savings accounts in addition to or instead of checking accounts. Savings accounts allow you to earn interest (a percentage of money) off of your money. For example, if you had a savings account with $100 that earned 2.5% interest a year, you would earn $2.50 a year. The more money you have in your savings account and the higher the interest on your account, the more money you'll make each year.

While savings accounts earn you money (and checking accounts usually do not), you are not allowed to write checks from your savings account and sometimes you are only allowed to make a certain number of withdrawals (removing money from your account) per month or year. Also like checking accounts, savings accounts often require you to keep a minimum balance in the account.

A good rule of thumb is to look at checking accounts (and your money in the account) as something for day-to-day use, like paying for groceries, utility bills, and rent, while savings accounts are for longer-term money (money you are setting aside for holidays, big purchases, or emergencies.)

You can find out more about opening a savings account and questions you may want to ask a bank in the next section.

Next: How to Open a Bank Account

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