How to Figure Out the Best Bank Account for Saving Money in Under 1 Minute

30.jpg

by Michelle Teo

There are more bank account options than bagel options in New York City nowadays. And at the end of the day, everyone wants to find the best deal for themselves, but in the least amount of time possible. I mean, come on, who really wants to be spending hours researching the different CD and savings interest rates, fee structures and fine print policies?

In addition to that, it’s sometimes difficult to know what features or traps you’re supposed to be looking for.

 Well, the good news is that it’s 2019 and there are now great technology apps for that. In fact, Lifesaver is designed to do exactly that for you. It recommends your best banking options based on your specific personal finances and financial needs in less than a minute. 

It takes into account your personal finance situation and evaluates the following criteria to find you your best option.  

What’s the difference Between a savings account, checking account or a CD, anyway?

To start, it’s important to understand what different bank accounts exist for the purpose of saving money. There are basically three types of bank accounts that are designed for your savings. 

They are: 

  • Savings accounts

  • Checking accounts 

  • Certificate of deposit (CD)

SAVINGS ACCOUNT

A savings account allows you to stash your emergency funds away. It limits the number of transactions you can make per month and provides less interest than a CD account. However, keeping a separate savings account means that there’s money that you’ve stored away that’s isolated from your day-to-day spending, meaning you have a higher probability of actually saving for your emergency fund.

CHECKING ACCOUNT

A checking account is for day-to-day banking such as receiving paychecks from your employer, paying bills and withdrawing cash. You can have a debit card and a checkbook with it. Since your money isn’t going to be sitting there for a long time earning interest, many checking accounts do not offer interest rates. 

For a deeper dive on checking accounts, keep reading here.

CERTIFICATE OF DEPOSIT (CD)

A CD is a bit more complex. The interest rates are higher, but in return, you cannot withdraw your money for a specified period of time that you agree to when opening the account,  which can be anywhere from three months to five years. It’s a larger commitment than a checking or savings account. If you withdraw your money before the specified period, you’ll incur a costly penalty fee. So, if you’ll probably need to tap your savings sooner rather than later, it may be better to store it in a savings account. 

The Different Fee Structures to Look Out For

As mentioned before, different types of accounts have different interest and fee structures offered. When you’re evaluating which one will be right for you, make sure you consider the following factors.

SAVINGS ACCOUNT FEES

Savings accounts normally offer low fees and low interest rates. However, you want to be wary of overdraft policies in case you draw more money than what the account has. Notably, the best rates offered for savings accounts tend to come from online-only institutions or community credit unions. 

CHECKING ACCOUNT FEES

Since this is your day-to-day banking account, fees and interest rates offered are generally low—sometimes nonexistent. However, similar to savings accounts, you also want to check that the overdraft policy isn’t high or has charged several times. You also want to make sure that you’re getting a good deal in terms of your ability to withdraw from ATMs outside of the bank’s network (hopefully with low fees or better, no fees). You may also want to avoid any monthly maintenance fees, though sometimes an account may have a suite of features and services that are well worth it. 

CERTIFICATE OF DEPOSIT (CD) FEES

As a rule of thumb, the longer the time period of the deposit, the better the interest rate. However, as you incur a costly fee if you withdraw before the specified time period, make sure you’re comfortable and won’t be needing that money any time soon. 


Narrowing Down the Best Options

Just to mention, all bank accounts in the U.S. are protected up to $250,000 with the Federal Deposit Insurance Corp. So, under this figure, banks can’t actually lose your money.

When you’re narrowing down your options, rest assured that all banks are pretty much equally safe in terms of stashing your cash. So, don’t keep all your accounts under the same bank if you find better deals around the place. If you find a great savings account online, and then a great checking account that suits you at a credit union nearby, then you should definitely go for it. 

LIFESAVER RECOMMENDATIONS

To give Lifesaver a whirl, I’ve included the recommended best bank accounts for someone earning $50,000 a year with around $10,000 of savings. They have the goal of saving an additional $5,000 in 2019. 

Screen Shot 2019-08-12 at 12.00.35 PM.png
  1. Online Savings by Goldman Sachs

    • Earn 1.2% APY interest

    • $0 to open and $1 to earn interest

  2. Online Savings Account by Ally Bank

    • Earn 1.2% APY interest 

    • No monthly fees or minimums to open

  3. High Yield 12 Month CD by Ally Bank

    • Earn 1.35% APY interest

    • No monthly service fees or minimums to open 

Here’s a snapshot of the first Lifesaver recommendation for an online savings account with Marcus by Goldman Sachs. 

If you found this article useful, keep reading here! And be sure to download the app for even more wisdom and super simple financial management tools.

How to Save Thousands of Dollars This Year (and Feel Better About Yourself Too)

the-frugal-spectrum.jpg

Today, we feature a guest post from Michelle Teo, Lifesaver’s copywriter and content specialist. Michelle has founded and worked for multiple startups across three continents, so she knows a thing or two about putting money to work.

“Save money!” they said.

“Impossible!” I said.

 Honestly, I have rental payments, credit payments, food bills and air conditioning in New York City hitting me every month. Most of the time, I’m just struggling to keep my head above the water. 

For example, me in New York City as illustrated:

As you can see, I’m just a normal person trying to make ends meet.

As you can see, I’m just a normal person trying to make ends meet.

However, one day I asked my financially savvy friend about how she’s saved money, given that she works for this broke startup that really doesn’t pay her anything.  She came up with three simple suggestions that actually helped me bank away an extra few hundred every month.

And guess what? They actually saved me a few thousand dollars every year! Yep, you heard me. All that moola and my life didn’t even get worse with saving. In fact it only got better.

So, here it is: the wisdom she passed on to me, I now give to you (editorialized only a smidge, I promise).


Embrace Healthy Eating and Well-Being

I started meal prepping. Yes, that’s right. I actually made my lunches for the week on Sunday afternoon, and took them to work with me instead of blowing $10 extra eating out every day. I saved $100 bucks a month doing this, which worked out to be $1,200 per year. I also started impressing my Hinge dates a lot more with my new and improved skills.


Low-Cost Food Ideas

Curried lentils! Mmmm.

Curried lentils! Mmmm.

  • Bananas: 40 cents each

    • Great for breakfasts, snacks and summer smoothies

  • Oats: 18 cents per serving

    • Great for breakfasts and really lazy dinners 

  • Lentils: 11 cents per serving

    • Favorite meal is curried lentils by far

  • Brown Rice: 18 cents per serving

    • Goes with anything and everything. You can even make rice pudding out of it.  

  • Chickpeas: 35 cents per serving

    • Great for dinners but also desserts. I’m not kidding, try making chickpea, banana and chocolate slice. It will blow your mind. 

Now throw some eggs, chicken and salad into the mix, and you have a much healthier lifestyle than grabbing Chipotle or Panera every day.

There are lots of amazing curries, quiches and casseroles you can make with these simple ingredients. And if you Google “Low-cost and healthy meals,” you’ll be set for life. In fact, here’s 77 low cost food ideas! Enjoy!


Stop Playing Video Games!

I also decided to cut that out. That includes secretly paying for more gold coins on those sneaky farm game apps on my iPhone. I also cancelled Amazon Prime subscriptions and all my entertainment subscriptions like Hulu and HBO. I only chose to keep one: Netflix. And of course, I kept Spotify. Yep, couldn’t live without those two. 

In addition to this, I replaced my habit of going to movie theaters with instead throwing movie nights with my friends. I also took up a subscription at the local Planet Fitness Gym ( $10 a month!) and started hitting the gym pretty regularly.

Needless to say, I feel a lot better nowadays. It’s also worth mentioning that I look really good now.

And with all that, I saved $90 a month! That’s $1,080 per year! Not bad at all.


I Stopped Buying the New iPhones

brokewokeP.jpg

I know. I also stopped buying lots of other things new

Like:

  • MacBooks - Because according to some people, refurbished by Apple is even better than new.

  • Cars - Anything that loses half its value as soon as it leaves the store is a decidedly bad investment.

  • Televisions - Can you really tell the difference?

  • Clothing - Designer apparel at H&M pricing? Yes, please.

  • Shoes - Seriously, have you checked out these sneaker marketplace sites?

  • Furniture - Nothing wrong with secondhand! Plus, furniture that’s seen some love has character.

And as it turns out, none of these items needed replacing as often as I thought. They continue to work just fine, even with a few scratches here and there. And you know what? Nobody noticed. My life has continued on just fine. 

Not forking out on new models every year has definitely saved me thousands of dollars.


Other Unnecessary Things

I realized there were a few other things that I could live without that didn’t really make a material difference to my quality of life. 

  • I tried a three-month “No Uber challenge”. I saved $120 in 3 months! I realized I could plan my life around the subway and walking a little further every now and again, so that’s $500 extra in my pocket per year. 

  • I stopped buying hair products and even cut my own hair when I could. I realized I was spending $40 a month on these things and no one even noticed when I stopped. Once again, that’s an extra $500 bucks going straight back into my wallet. 

  • I used Nivea cream instead of buying expensive skin care products. Yes, that was one of my secret weaknesses. But in fact, I realised Nivea works even better than the $100 Chantecaille face cream I had been splurging on from Space NK during both winter and summer seasons. So, I realized that I probably no longer needed my five-step skin care routine, either. Yep, once again: another $500 bucks, right back to me.

So, there you have it!

Saving money doesn’t mean a lower quality of life. In fact, I’ve actually experienced a much higher quality of life since. I started eating better and working out, and stopped feeling stressed out about my lack of savings—because for once in my life, I’m actually saving!

Anyway, if you’re interested in figuring out what to do with all your newly acquired savings, perhaps one of our other articles could be useful to you: The Best Banks for Students and Young Professionals.

What is a Checking Account?

All about accounts.

A checking account is a kind of bank account. In fact, when most people talk about their bank accounts, they’re probably talking about a checking account. 

But let’s take a step back. What is a bank account? 

Well, technically, an account is just what it sounds like: a record or log of events. In the case of a bank account, what is recorded are transactions—the inflows (credits) and outflows (debits) of money. And of course, bank accounts enjoy the notable distinction of being one way of storing your cash at a financial institution. In other words, “having a checking account” describes a relationship in which a bank or credit union has agreed to hold onto and provide easy access to your money. 

Most checking accounts still maintain their function as a “record,” too. Customers with checking accounts expect to be able to access their account history in a variety of ways—on the web, on their mobile device, by telephone, or through paper statements. As you might imagine, keeping track of inflows and outflows is a critical piece of the puzzle for anyone looking to improve their financial health.

Way Better Than Your Bedroom.

Besides the fact that putting money into checking means you’re less likely to spend it, every dollar of your hard-earned cash is actually insured. You may have heard of the Federal Deposit Insurance Corporation, usually shortened to FDIC. They’re the U.S. governmental agency that guarantees your money (under $250,000) is safe no matter what—even if the bank goes out of business! The Nation Credit Union Association (NCUA) does the same thing for credit unions. And since 1933, when the FDIC began, not one person has ever lost money in an FDIC-insured bank or credit union. That’s why we’ll always recommend only banking with an FDIC- or NCUA-insured institution. Thankfully, it’s pretty rare to find a bank or credit union that doesn’t insure its money. 

On the other hand, cash tucked under your mattress is susceptible to robbery, house fires, flooding and other natural disasters, and of course—just wandering off. If an unexpected emergency occurs in your home, your money may be gone for good. Banks and credit unions safely store your money in a locked, fireproof safe. With that kind of security comes peace of mind, so it becomes easy to see why some people really love their banks.

What’s it all for? 

Since most people use checking accounts to do things like pay bills, cash checks, make daily purchases and withdraw cash, many checking accounts offer a suite of services that make these types of activities easier. 

Common features of checking accounts are things like automatic online bill-pay (which is exactly what it sounds like!), free check cashing, and mobile deposit (depositing a check into your account by just snapping a photo of it with your mobile phone). Many employers will work with your bank to directly deposit your wages in your checking account—meaning no more trips to the bank to deposit your hard-earned check! This is called direct deposit, and it’s so convenient, many banks will waive certain fees to reward you just for using it! Not to mention, checking accounts almost always provide ATM or debit cards, which make quick access to cash and online purchases a breeze. Depending on your lifestyle, some of these services might become absolutely indispensable once you begin using a checking account! 

If you’re serious about becoming financially healthy, checking accounts are the place to start. They act as a kind of homebase or headquarters for your money, and you’ll later be able to use them to put money into (or fund) other types of accounts, like savings, investment, and retirement accounts. 

Not only that, but a checking account demonstrates that your life is together. Sometimes landlords, real estate brokers, lenders, car salesmen, government offices issuing ID cards, or even potential employers may request to see a bank statement. Such requests pop up in order to do things like obtain proof of address, verify income, or just confirm that you are who you say you are. And with all these doors that checking accounts can help to unlock, it’s easy to see why many people consider having a checking account to be foundational to a stable life. 


Putting it all together.

When looking for the right checking account, it's important to keep in mind that there are different types, and the features they provide can vary. For example, some accounts are online only. Some will earn interest when certain requirements are met, allowing you to make money just by leaving money in your account! In deciding, it’s recommended that customers think about which checking account features are important to them, as some may come with a fee. Others, however, may have fewer features, but are completely free.

With Lifesaver, finding and keeping track of the right checking account for you is easier than it’s ever been. We’ll only match you with the best accounts from outstanding banks and credit unions in your community. From there, we help you live your best financial life—every step of the way. 

Was this helpful? Let us know.

4 Ways to Get Your Money Right This Fall

brokebutwoke.png

Forget Pennywise the clown. We know spooky.

Happy Halloween!

Here’s something to truly terrify you on this All Hallows’ Eve: The average U.S. household had $8,437 of credit card debt in August this year. That means many Americans will be paying for their summer vacations and halloween costumes well into 2019. That’s why we put together this list of the top 5 ways to get your money right this fall.

The best place to start tackling your debt is to back away from your credit cards. One of the fastest and most effective ways to start tackling credit card debt is to stop adding to the amount you already owe.

#1: Come up with a plan

As tons of stores and weirdly eager neighbors are happy to remind us, the holiday shopping season is nearly here. But holiday shopping with a large credit card balance can be a recipe for financial disaster. You may want to start your planning by checkout our 5 best hacks for eliminating credit card debt.


#2: Set a budget

No “one weird trick” here. Once you’ve developed a plan, it’s time to put it in action. Your plan is only as effective as your budget so make sure you’ve checked out these budgeting tips.

#3: Get a Holiday Savings Account

You can get a savings account for pretty much anything, believe it or not, and that includes your holiday shopping, vacations, back to school budgets and plenty of other options. Armed with a plan, a budget and an interest-earning savings account, holiday spending is something you can relax and responsibly enjoy. If you’re on the fence about a savings account, here’s quick resource we put together to help you decide.

#4: Don’t Repeat the Same Mistakes

If you don’t want to be burdened by credit card debt for years, you have to commit to long-term change. Change can be subtle or drastic depending on you planning, budgeting and commitment. You can start simple by finding ways to save—whether you’re a student, young professional, freelancer or artist, there are products from community banks and credit unions   designed just for you.


#5: Positive Reinforcement

Whatever steps you decide to take, acknowledging debt may seem like a small thing, but it’s the first step toward handling it responsibly. So, good job! Debt sucks—it’s complicated and confusing for almost everyone. Lifesaver makes it easier than ever before to find what’s right for you.

3 Best Banks in New York for Students and Young Professionals

achievement-agreement-arms-1068523.jpg

It’s fall in New York—that means schools (and the U.N.!) are back in session, and crosstown traffic is a mess. Whether you’re a college freshman, a graduate student or a young professional just making your way in the city, there are three local banks you need to know about if you’re serious about establishing (or reestablishing) New York as your homebase.  

Between absurdly high rents, entry-level wages and student loan payments, finding ways to save if you’re under 25 isn’t easy. That’s why we’ve compiled a quick list of the three best banks in New York for students and young professionals.

  1. Ridgewood Savings Bank

    What we love:

    This member-owned community bank is the largest mutual savings bank in New York State and offers hassle-free checking accounts for students. If you’re looking for a community-centric approach to banking, Ridgewood might be a good fit. The bank offers several no- to low-fee account options with 24/7 access via online and mobile banking. They also boast 22 branch locations in Manhattan, Brooklyn, Queens, the Bronx and Long Island, so wherever your adventures take you, Ridgewood’s probably there.

    What they offer:

    Student Advantage Account: This is a great starter checking account for students with a low $25 minimum to open. The best part, though, is that it has no monthly maintenance fees. Designed with students in mind, this checking account offers a one-time annual “oops” fee waiver, letting students experience that riveting first “OH $*%@” moment of overdrafting—minus the insufficient funds fee.

  2. Dime Bank

    What we love:

    If community is what matters to you (and you maybe own one of these t-shirts),  then Brooklyn-based Dime Community Bank hits all the right marks. Founded in 1864, Dime has deep roots in Brooklyn extending over 150 years. You’ve probably walked past their iconic building. With four locations in Williamsburg and 24 more across Brooklyn, Manhattan, Queens and Long Island, Dime offers a variety of no-fee checking and savings accounts.

    What they offer:

    Perfectly Free Checking: This one really lives up to its name, and then goes a little extra. With no monthly fees, no minimum balances, and no purchase requirements, it also offers 50 free personalized checks and a "thank you" gift for opening.

  3. Webster Bank

    What we love:

    This Connecticut-based bank is one of the largest regional financial institutions in the Northeast with over 175 branches between New York and Boston.

    What they offer:

    Student Checking Account: This free checking account is especially designed for students and is guaranteed to remain free for five years, with no monthly maintenance fees and a low $50 minimum to open. Customers also get up to four ATM fees refund every month month, and one overdraft fee refund per academic year.

We know that saving money in the city is hard. That’s why Lifesaver makes finding the right tools easier than ever before by intelligently matching you with the very best financial offerings from your community, and with technology companies from around the web. Check us out in the App Store to browse your matches today!

5 Best Hacks for Eliminating Credit Card Debt

credit-cards-1207523_1280.jpg

Acknowledging debt may seem like a small thing, but it’s the first step toward handling it responsibly. So, good job!

Debt sucks—it’s complicated and confusing for almost everyone. For self-employed contractors and freelancers, how you manage your debt is especially important, since your personal credit directly affects your business credit, and therefore your ability to work and earn a living.

So, here it is—Lifesaver’s “cheat mode” for crushing debt.

#1: Stop Piling On the Debt

Back away from your credit cards. That means all of them—the personal and business cards.

One of the fastest and most effective ways to start tackling credit card debt is to stop adding to the amount you already owe. You may find it harder and harder to reach for your wallet when you know that it means dipping into your hard-earned cash.

This may sound obvious, but you’d be surprised by how many people attempt to combat debt while continuing to rack it up. So, resist the urge to swipe while you strategize and implement a plan to help you conquer your debt.  

#2: Confronting Your Debt

If you want to slay the debt dragon, you have to start by knowing exactly how much you owe and to whom. Gather all of your credit card statements, open a spreadsheet, and let’s start crunching numbers. Start by detangling your debt, separating out your personal credit card debt from your business debt. Go card by card, entering the balance for each. List important details like the amount owed and the annual percentage yield on that credit card.

Hopefully, you’re relieved by what you see. But if you’re feeling slightly depressed after knowing exactly how in the red you are, take comfort in knowing that we’re halfway there toward putting together a solution.

#3 Creating a Budget

Understanding your income and expenses allows you to start planning and experimenting with a few differents ways to save and lower your debt. We’ve got a step by step guide here. Once you’ve listed your total monthly income and expenses, subtract your total income from your total fixed expenses. The formula couldn’t be simpler:

(Total monthly income) — (Total fixed monthly expenses) = Money left over for spending (fun) or saving

Unfortunately, debt sometimes does require you to cut back, and that likely means you have to reallocate some your discretionary spending toward paying off your debt. Monthly subscriptions are a good place to start. Individually, their cost seems minimal, but these costs add up at end of each month. Besides, do you really need all three or four paid memberships to those music/movie/TV streaming platforms? Determine a monthly percentage of money that you’re comfortable with putting toward paying off credit card debt. Ensure the amount you choose works even when your income fluctuates. Ideally, you want to pay over the monthly minimum, so you can reduce the interest and the principal you owe.      

#4: Maximize Your Cash Flow

There are several ways to increase the amount of cash you have each month. You can start simple by reducing your spending. Put yourself and your business on a spending diet for a couple of weeks or months. Easy things like brewing your own morning coffee/tea, or preparing lunch at home, help avoid unnecessary expenses—for some, this alone can help save upwards of $200 a month. Spending diets are a test of wills and wallets, so tailor it to your financial specifications.

Try to make more money. OK, have your eye roll, but hear us out. It might be time to monetize your side-hustle. Maybe you‘ve been cooking, singing or making your friends laugh for free. Consider trying to generate revenue from your passion on the side.

You could also consider adjusting your fee or payment structure for gigs. This is easier and more flexible than it sounds. You could start by getting paid faster. Maybe you have a recurring gig or client that’s mostly great, but takes forever to pay you. Automating your invoicing system may help minimize the time it takes to get your hard-earned cash. Requesting partial payments for projects upfront is another way to increase your monthly inflows.

#5: Work Smarter

Working smarter means realizing that your credit card habits need to change for the better and, more importantly, for the long term. If you don’t want to find yourself buried in credit card debt again, you have to start incorporating these tricks into your regular money management routines.

Working smarter also means using the right tools for the job. Are you being eaten alive by monthly checking account fees? Alternatively, maybe your savings is just sitting in an account collecting dust—rather than accruing interest. Lifesaver makes it easier than ever to find the financial institutions and services that fit your wallet and lifestyle, so take advantage.

 

Do Savings Accounts Really Work?

Don't even think about it!

Don't even think about it!

So, you’re unsure about opening that savings account everyone is always nagging you about.

“There’s no point, interest rates are way low right now,” says that guy who just dropped two grand on VIP passes to Coachella. “Besides, the smartest way to tie up your money right now is in crypto,” says your friend who really needs the price of BitCoin to start going up again.

Okay, we get that you’re skeptical, and it’s only normal after all. It’s your hard-earned cash we’re talking about here. So we did some research and compared a few different approaches to try and figure out if savings accounts really do work.

But first things first: If you want to measure the effectiveness of something, you have to know what it is!

What is a Savings Account?

Savings accounts are issued and held by financial institutions like banks and credit unions. As their name suggests, they are widely considered a safe place to keep savings. But unlike checking accounts, savings accounts rarely offer debit cards or checks, and limit customers’ number of withdrawals per month to six.

Who Are They For?

Since most people need to access their cash more than six times a month, savings accounts are great for money not needed right away—like emergency funds and long-term savings.

So, why do people open savings accounts instead of just leaving all their cash in checking?

Advantages of a Savings Account

In a word: interest. Savings accounts can earn customers’ additional money (called interest) on their savings. How much interest is earned is determined by the amount of money in the account, and how long it’s left there.

Safety is another advantage. With FDIC-member banks and credit unions, the federal government insures your money up to $250,000 for each account you have—so you should always bank with an FDIC-insured financial institution. That means that if there’s a fire, flood or some other catastrophe, or if there’s a run on the bank, your money stays safe.

 

Some Benchmarks for Comparison

  • Access to your Money: How easy or difficult is it to access your cash?

  • Potential interest-earnings: Can your saved cash make you even more money?

  • Your money’s safety: How safe/trustworthy is the place you keep your cash?

Great—so we’ve covered exactly what a savings account is, and we have our benchmarks, as well as a few important questions to ask. Now let’s compare savings accounts to other saving methods by rating them according to these benchmarks. To keep things simple, we’ll use a rating system of High, Medium and Low.

 

The Savings Account Method

Access: Medium

Savings accounts provide limited but relatively frequent access (six times per month).

Interest: High

Savings accounts are interest-earning so the potential of earning interest is real. To sweeten the deal, the more money you save, and the longer you save it, the more interest you stand to earn.

Safety: High

If you open an account with an FDIC-member bank or credit union, your money is insured by the Federal Deposit Insurance Corporation up to $250,000, no matter what.

 

The Cookie Jar/Under-the-mattress Method

Forking over your cash to a financial institution makes you a bit wary, so instead you keep it close—like really close. The downside is you’ve taken on all of the risk of keeping your money safe, and have little recourse in the event of theft or loss. Plus, that money isn’t exactly working hard for you.

Access: High

You have ready access to your cash, which can be both a good and bad thing, depending on how good you are at fighting the temptation to dip into your stash.

Interest: Low

Actually, to be more accurate, interest is non-existent. Neither the mattress nor the cookie jar can generate interest (though we can think of someone who wishes it were otherwise).

Safety: Low

It may surprise you, but your home isn’t a safe place for your savings. Things like fire, flooding and crime all put your money at risk. Plus, a lack of records or statements makes replacement or reimbursement of your money nearly impossible.

 

The Checking Account Method

You already have a checking account, and you keep a little extra in your account for a rainy day. Why get a savings account? Well, it all comes down to interest. There’s a good chance you’re missing out on interest-earnings, since savings accounts generally offer higher rates than checking accounts. In fact, most checking accounts don’t offer interest at all.

Access: Medium to High

You’ve chosen to keep your money huddled together in one account, which means only budgeting and self-control are keeping you from dipping into your funds.  

Interest: Low

You might be earning interest, but you would probably be earning more interest with a dedicated savings account. Maintaining your spending and savings cash together might seem like a good idea, but constant fluctuations in your account balance may cause you to lose out on potential interest earnings.  

Safety: Medium

You’ve essentially put all your eggs in one checking account basket. This is generally okay if your cash is held at an FDIC-member bank or credit union, but it can still lead to some annoying inconveniences. Loss or fraud may cause you to temporarily lose access to your cash or rainy day funds, while you wait for your bank to unfreeze the account and send you a new card. Let’s just hope nothing happens that requires emergency money while you wait.

 

The Trusted Loved One Method

Your honest enough with yourself to know that ready access to your dough is just not for you. So, you hand a bit of your cash over to someone you know and trust. They want what’s best for you, and they won’t let you blow $200 on an impulse buy Instant Pot. That’s some seriously great Adulting on your part, but it’s an awful lot of responsibility, trust and pressure on your loved one.  

Access: Medium

By design, you’ve chosen a spouse, parent or other loved one to safeguard your cash. But in reality, you’ve just outsourced the cookie jar. (See above.)

Interest: Low

Zilch, nothing. Like the underside of your mattress, your loved one can’t generate any interest.  

Safety: Low

It may feel safe to keep your cash with the ones you love but your designated loved one (and by extension you) have little recourse in the event of loss or theft.

 

Results

Yes, savings accounts work! In fact, not only do they work—they work really well. Everyone’s been right the whole time. Savings accounts are an effective, safe place to store your cash, and they typically allow you to earn some interest in doing so. They work even better with a dedicated savings budget.

And if you’re ready to pull the trigger on getting started saving and need some help finding the right bank for you, well, we’ve got you covered. Download Lifesaver today to view your best matches.