Paychecks. Tax refunds. Interest. Checks.
These are all things that are made possible (or easier) by a having bank account.
Keeping track of your bank account is easier than it’s ever been. In the world of technology, you can check your bank account from anywhere with a few swipes on your phone.
Let’s talk about the benefits of saving money in a bank. Because if you don’t have a bank account, you’re missing out.
6 Benefits of Saving Money in a Bank
Diversification is all the rage in finance. It’s good to have income coming from several different places, because you never know when one source of income will suddenly stop.
It’s also good to keep your money in different places. If something bad happens to the money in one spot, at least you have more waiting somewhere else.
If you don’t have a bank account, you’re missing out on several benefits. Let’s talk about a few of them.
Remember the scene from It’s A Wonderful Life where there’s a run on the bank?
If you have money in the bank in the form of a typical checking, savings, money market, or CD account, that money is backed by FDIC Insurance from the U.S. Federal government. That means that even if the bank fails, your money remains safe.
Online Bill Pay
Have you used online bill pay? If you have a bad habit of waiting until the last minute to pay the bills (only to find that you’ve run out of stamps), this could be the perfect solution.
Most bills can be paid through your bank simply by setting up your bill pay information right online. Once you get past the setup, plugging in the numbers and clicking send makes bill paying day easier than ever. And fewer checks, stamps, and envelopes to buy is more money saved.
If you store all your money under your mattress, you’re at risk of losing it. Theft, fire, and natural disasters are some of the ways you could lose it all.
It’s true that most accounts pay very little interest these days. But if you look, you can still find banks that pay you interest. Why walk away from free money?
Check with your local credit unions to see how much interest they pay on savings accounts. Many times you’ll find a better rate at a credit union than a national bank.
You can also open an account at an online bank. Many of these banks are tied to credit card companies, but they work the same as any other savings account. You can use local ATMs to access this money, but sometimes it’s easier if you have a local checking account open that you can link to an online savings account.
Some online banks that pay interest on accounts include:
Capital One 360 (my personal favorite bank). Right now they are offering .20% APY on savings accounts.
Discover Bank. Right now they are offering .95% APY on savings accounts. I’ve used this bank in the past and we had no problems with them.
Ally Bank. Another bank that we use. They are offering 1.00% APY on savings accounts now.
Have you ever been out and wished you had a little more cash? Maybe you found the deal of a lifetime on something you’ve always wanted. Or maybe your car broke down and you need to pay the tow truck.
Whatever circumstance you face, one of the benefits of saving money in a bank is that you can grab money when you need it. There are ATMs nearly everywhere you go. If you don’t have a bank account, you can’t take advantage of these magic machines that spit money out when you need it the most.
Whether you’re filing taxes or trying to remember whether you paid a bill, having a record of your payments is a good thing. I prefer to keep the bank as a middle man between me and the bill charging companies. Most of the time we don’t have any problems. But when there is a dispute, it’s nice to be able to produce proof that you made that payment.
And with so many things available online, you can easily access those records from anywhere. Plus, no need to clutter up your home keeping years worth of statements, receipts, and cancelled checks.
Diversifying Your Cash
With all these arguments, would I suggest you keep all of your money in a bank? Not necessarily. Having cash on hand at home is also a good idea. You never know when the local ATM will be down. Emergencies of all sorts happen. It’s good to have cash in a few different locations.
And even at home, I’d recommend keeping cash in different forms. Invest in extra food (assuming you have the space to store it). Have smaller bills and larger bills so you don’t have to flash $100s whenever you make a purchase.
For more ideas on where to store your cash, check out How to Break Up Your Paycheck.
Do you keep money in a bank account? Why (or why not)?