Banks use the money you deposit into your savings account to make loans to other banks. In return, the bank pays you interest on your account balance. The more interest you earn, the more your money grows, so it’s worth doing your homework to make sure you’re earning the highest rate possible. What Is the...
Saving money is the key to setting yourself up for financial stability. As a general rule, you should aim to save at least six months’ worth of expenses in an emergency fund in case you lose your job or you have an unexpected expense, such as medical bills or a major car repair. It's also a good idea to save for future goals like retirement. Savings accounts, like a high-yield savings account from AmEx, offer a number of advantages that keeping your money in a piggy bank or under the mattress simply won't provide — most notably, interest.
One of the biggest benefits of a savings account is the interest you can earn on your deposit. Additionally, the FDIC insures all savings account deposits up to $250,000 per depositor.
Another advantage of having a savings account is liquidity, which means funds are accessible at any time, though that access is limited to a maximum of six withdrawals per monthly statement cycle.