If you are storing your money under the mattress or depositing your savings in your checking account, you are probably missing out on several benefits of a savings account.
Creating a portfolio of high-quality investments is one of the ideal ways of getting ahead financially and achieving your long-term goals. When choosing an investment option, a savings account is one of the great options you can opt for.
Let’s look at some of the benefits of investing in a savings account.
Saving for a rainy day
Practically, saving involves setting aside a significant amount of cash today for use in the future. This is commonly referred to as ‘forgone consumption’ in which you put some money into a personal investment account instead of spending all of it.
Savings serves as a perfect starting point for investing as it offers you the capital you require to buy different assets. By depositing some cash into your savings account, you will have somewhere to turn to if anything goes bad during a rainy day.
Potential long-term returns
While saving involves depositing some money to use in the future, joining the different personal investment account options will mean putting your money to work for a potential worthy return after a year or two.
The different classes of investment saving accounts such as fixed interest, cash, shares, and property normally generate different returns, usually relative to the risk involved in the investment.
Either way, as an investor, you have the potential of earning capital growth over a particular timeline as well as ongoing returns.
Safe investment options
Unlike other investment options, one of the main benefits of a savings account is the safe investment option it provides. Unlike other investment options, a personal savings account does not invest with your money but still earns you decent returns. All you have to do is deposit a certain amount of cash in your savings account to enjoy this feature.
Earn additional income
Investing in a savings account helps earn some interest on the percentage of the amount deposited. You can choose to use the return on investment as a regular source of additional income for your day-to-day life or reinvest the cash to grow your wealth more.
Inflation refers to the ongoing increase in the cost of living over time and often significantly impacts our financial well-being. Investing in personal saving account options provides a perfect way for you to outpace inflation and generate great financial returns over some time and capital growth.
Minimum investment amount
While investing in a savings account earns you some extra interest, it requires a minimum amount to invest. You can check through the different investment options in Singapore, and you will see that a savings account is most affordable.
You just need to keep the minimum balance in your account to continue earning the interest. However, the minimum deposit amount varies for different banks.
Savings are vital, and a personal saving investment account will help you do so while enjoying all the other benefits. Based on the extent of risk you are willing to take, a savings account can mean enjoying more extra cash.
But ensure to check the rate of interest offered by the bank as well as other terms of conditions before going ahead to invest in a savings account.