Benefits of saving

There are lots of good reasons to save… you earn interest on your money, you have cash available when you need it – and you can afford to buy the things you really want!  And anyone can save – all you need is a savings goal and a small amount of money to get started.

What type of saver are you?
The questions most people ask when it comes to saving are: ‘How much should I save, how do I start and how do I make saving a habit?’ Think about your future plans, then ask yourself the following questions:

  • Do I want to be able to withdraw money whenever I want?
  • Do I want to protect my savings and not make regular withdrawals?
  • Do I want a simple but disciplined savings plan that will help me to reach a specific goal?
  • Do I just want to save for a rainy day?

Once you’ve answered these questions, you will be able to decide what kind of savings account you need:

  • Short-term savings accounts give you immediate access to your money and pay you some interest on your savings.  These accounts are perfect if you want to save for smaller items, like a new TV or furniture.  It’s also a good account to have in case of an emergency, like if you have to pay for repairs to your car, or for funeral costs, because you can withdraw your money straight away.
  • Longer term savings or investment accounts allow you to save for a number of years – usually five years or longer – and they pay higher interest than short-term savings accounts.  These accounts are ideal if you want to save towards buying a house or a car, for your children’s education and even for your retirement.  You won’t be able to withdraw your money without giving notice, so you won’t be tempted to spend it before you’ve reached your goal!

Talk to your bank about the types of savings accounts they offer.  Find out upfront how much interest you will earn on your savings and then decide which account is right for you!

Next article: Types of savings and investment accounts