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The Question

Many of my friends have been talking about savings accounts that they recently opened. It sounds like a good idea and I want to open one too but I don’t know how. I tried to look it up online but it seems kind of confusing. Can you help?

Our Answer

Opening a savings account is a great idea! It’s the first step toward taking control of your personal finances, and it’s not as difficult as it may seem. A savings account is not much different from a checking account, except it usually pays a small amount of interest that is added to your account each month. Not too shabby, eh? There are many types of savings accounts so make sure you research the various options and discuss them with your banker when you meet. Depending on the type of savings account there may be other restrictions to keep in mind, such as a certain time frame during which you cannot withdraw your money. A savings account provides a safe and secure place to store your money and, hopefully, really enable it to “grow” by regularly adding additional dollars to your account. Plus there is the added bonus of collecting interest each month. Cha-ching!!

Many people find it convenient to open a savings account at the same bank or credit union where they already have a checking account. That way they see both accounts on the same monthly bank statement and they deal with the same people if they need assistance. Making transfers between the two accounts can also be a lot easier. Of course you don’t have to use the same bank or credit union and in today’s web-wired world, you can even open an online savings account without ever having to go into a building. When opening an account at a bank, you will need to fill out forms with some personal information, so be sure to bring along your driver’s license, Social Security number, and your check book. When you open the account, they’ll ask you to make your first deposit, which you can do by writing a check or offering cash. Good luck!

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