We all know that saving money is important, whether you are saving money on family vacations by just getting water at restaurants, or you’re saving a few fucks every year on gas by biking instead of driving, no one will deny that saving money is important.
But have you ever wondered what the true benefits of saving money in a bank account are?
Why are we always told it is a good idea to save money with a bank? If you’ve read my article, 4 Ways to Save Money without a Bank Account, you know there are other options out there!
But just like I stated in that article, I truly believe saving money in a bank is the best way to go. Here are 9 reasons why.
9 Benefits of Saving Money in the Bank
- Your Money is Safe
- Your Money is Liquid
- Access to Online Banking
- You Can Keep Track of Your Spending
- It’s Not Expensive to Save Money in the Bank
- Bank Accounts Are Easy To Set Up
- You Can Earn Interest on Your Savings
- You’ll Be Able to Access Credit Easier
- Saving Money in the Bank is Just Easier
If you don’t have time to keep reading, I hope these 9 points persuade you to open up a bank account and start saving your hard earned money within it, if you still need some convincing, keep reading as I go into each benefit in more detail.
Your Money is Safe
Saving money in the bank is by far the safest place to do so. Banks spend millions and millions of dollars every single year to protect their customers’ money. While you might have a nice safe at home, it fails in comparison to what banks can offer when it comes to protection.
Not only that, reputable banks offer their customers insurance on their money in case of loss.
Canadians banks deal with a crown corproation called the CDIC and American banks are insured by the FDIC.
In short, these institutions will provide protection to customers of banks that are members with these banks.
The CDIC provides up to $100,000 in insurance for their members clients where the FDIC provides up to $250,000 in insurance.
Quick Note #1 – Both the FDIC and the CDIC are not banks, they are insurance companies.
This insurance policy is automatically in place when you set up a bank account, so as long as your banker is a member of the CDIC or FDIC, you can sleep well knowing your money is safe and well protected.
Your Money is Liquid
A second reason you should save money in your bank account is because banks provide liquidity.
It’s really easy to access money from your bank account wherever you are. Most major banks have brick and mortar locations all around the country. And it’s not hard to find out where they are, a quick google search “[bank name] near me” and you’ll be flooded with locations that are close by.
And even if there is nothing close by, ATMs are more popular now than ever, they are everywhere! While it may cost a few dollars to make an ATM deposit, hey you pay for convenience.
Having your money tied up in things like cryptocurrency and high growth stocks might sound cool, but it’ll take a few days to convert into cash.
And listen, I’m not against investing AT ALL, I highly recommend people invest money, but you really need to have money saved in cash in a bank account too. Having money you can access in the next hour is just practical.
Picture this, your friend asks you “ hey want to go to a movie?”, your response “yeah sure give me 8 business days to sell off my Bitcoin and convert it to cash “.
Yeah no thanks buddy. Have money saved up in your bank account ready to go when you need it.
Another Financial Geek Article For You: Do Banks Close Inactive Accounts?
Access to Online Banking
Another major benefit of saving money in a bank account is that you get access to online banking.
In the new world of modern technology, banks have stayed bang on trend and adopted a lot of their processes to keep up with the digital world.
Need to send money to a friend? E-transfer can easily do that.
Have bills to pay every month? Yep, online banking allows you to pay bills online.
Paying off your Visa? Online banking.
I could go on and on, but the point is, when you sign up with a bank you’ll get access to their online banking portal and these platforms will save you time and energy.
You Can Keep Track of Your Spending
One of the main benefits of saving money in a bank as opposed to anywhere else is it allows you to track your spending.
Being able to track your spending can be highly beneficial if you’re like me and are constantly wondering where all your money is going.
All online banking portals will have a “Transaction History” tab which will allow you to look at when and where you’ve been spending your money.
If you really want to get ahead of the game and track your money by categories, I’d recommend connecting your bank account with a budgeting App like Mint.
Mint is actually one of my recommended products. I’ve used it for almost 5 years now. One of my favourite features of the app, that I talk about in my Mint Budgeting App recommendation post, is that consolidates your transaction history into buckets.
So for example it’ll indicate that you’ve spent $400 on food this month and $150 on restaurants.
I clearly need to stop eating out so much!
It’s Not Expensive to Save Money in the Bank
One more benefit of saving money in a bank is that it’s actually really inexpensive to do so.
A lot of banks offer their banking services for free depending on the type of account you get and your age.
Here is an article from Savy New Canadians which talks about 5 Free Chequings Accounts that are available to Canadians.
If you are a senior citizen, a youth, or a college student, shop around at different banks – you should be able to find a bank that can offer you what you need for free.
Additionally, if you sign up for an account that has a monthly fee, it may be worth it. I pay $16.95 a month for my banking but I get so many added benefits with my account that the value I receive far outweighs the cost.
While storing money in your house may be free, you run the risk of it being stolen or damaged, in which case it will be gone for good.
Bank Accounts Are Easy to Set Up
Bank accounts are so easy to set up that I’m calling BS on anyone who says they don’t want to go through the hassle of setting up an account.
I would actually argue that one of the biggest benefits of saving money in the bank as opposed to anywhere else is that the setup is so hassle free.
In my article, 4 Ways to Save Money Without a Bank Account, I mention using a homesafe, prepaid credit cards, a local storage facility or asking a friend or family member. I can confidently say all four of these methods would require more effort on your end than what it takes to set up a bank account.
You literally don’t need to leave your house! Most modern banks now allow all potential customers to sign up for their bank services online.
Put in some personal information, e-sign a few forms and you should be good to go.
Remember, banks desperately, desperately want more people using their banking services, so they make the sign-up process so easy these days.
You Can Earn Interest on Your Savings
While you won’t get rich from earning monthly interest on your cash savings within your bank, you will still earn some money. More than you would if it was collecting dust in your basement or storage locker.
Depending on the global economy, banks offer interest rates that can range anywhere from .01% to I’ve seen as high as 3.5%.
Quick Note #2 – Watch out for promotional interest rates that state something like “Get a 3.5% interest rate for a limited time”
For example, check out Scotiabanks banking plans here.
So this is basically just a hook to get you signed up. Once the limited time is over, that interest rate will plummet to whatever the non promotional rate is. So make sure you don’t fall into that trap and be sure to check what the actual interest rates are.
Now again, if earning interest was the only benefit of saving money in the bank, I would say don’t bother, but it’s not, I like to consider it as a nice bonus.
You’ll Be Able to Access Credit Easier
One more benefit of saving money within a bank is that banks usually give some level of preferential treatment to existing customers when it comes to lending money.
So if you ever need credit to buy a house, a car, maybe a student loan or whatever it may be, banks can usually help you out.
With that said, you’ll still need to have a good credit score and show proof that you can handle money well, but if all those things are true, you shouldn’t have a problem.
Remember guys, one of the main revenue sources for banks comes from interest payments on loans given out to clients. In other words, they want to loan you money!
I mean gosh, I swear I get mail everyday from my banks pre-approving me for higher credit card limits and lines of credit.
Quick Note #3 – Easy access to credit is not always a good thing, don’t take money you don’t need. While interest rates may be low, paying back the principal can be hard enough.
Saving Money in the Bank is Just Easy
The last benefit to saving money in a bank that I want to talk about is just the fact that it’s simply easier.
I’m not really sure how else to explain it other than saying it’s really just easier.
Saving your money within a bank account allows you to keep your money safe while at the same time making it very accessible to spend.
But not only do banks make saving money easy, they make spending money easy too! Gosh, it’s almost too easy to spend on our debit cards these days. “Tap here and you’re on your way”.
While this can be a dangerous feature for heavy spenders, it provides most of us with a huge convenience that cash just can’t give us.
So here’s the bottom line, there are many, many benefits to saving money in the bank. While there are other places you can save your money, I’d highly recommend using a bank for the reasons I discussed above.
If you already have a bank account open, I hope this article will help you appreciate the benefits that your bank (should be) is providing you.
If you don’t already have a bank account open, or you’re looking to change your bank, then shop around. Go on the websites of your top choices and look at the benefits that these banks and specific accounts within that bank can offer you.
Remember, banks are businesses too. If you are not 100% satisfied with their services, look elsewhere – you have lots of options here!
That’s it! As always, I hope you learned something from this article and most importantly found the information you were looking for.