Despite headlines of uncertainty and recession, this really is a good time for us to focus on the future – by saving money. Stashing away cash in a bank account keeps your funds safe, easily accessible, and earning interest to boost your future financial situation. Building up your savings now can also help alleviate anxiety over future financial situations and give you more choices if you do run into a hardship. Here are five reasons that now is a good time to save money.
1. We are spending less money
With COVID-19 changing our environment and altering our daily habits, we are spending a lot more time at home since businesses are closed to prevent spread of the coronavirus. Rather than viewing this as a limitation, it can also be an opportunity to save money we would normally be spending on gasoline, recreational activities, and shopping. During this time, you can support local businesses that remain open and eager to receive your business while tucking away a few dollars here and there that are no longer going toward commuting coffees and drive-thru lunches.
A good first step in deciding how much to save is determining your disposable income (the amount of money left over after you pay for housing, cars, taxes, bills, and living expenses). Take those extra dollars and transfer them from your checking account to your savings account at the end of the week or month. If you use INTRUST online banking, you can easily set up recurring transfers to happen without any extra effort.
If you have to start small, by using the $10 experiment or S.M.A.R.T. savings goals to put a few dollars away at a time, you will still feel a great sense of accomplishment once your balance starts to grow. A few dollars a day can add up to significant savings over the course of a few months.
2. There are many savings account options
There are many types of savings accounts available to you, depending on whether you want to keep your money easily accessible or earning a little extra. Here are four common savings account options where you can securely put aside extra funds:
The most obvious place to store excess funds is a traditional savings account, which earns a fixed rate of interest. A traditional savings account is easy to open online, accessible for up to six withdrawals a month, available in regular and youth savings accounts, and can be set up to receive funds from your checking account as one-time or recurring transfers. It’s a simple account with the benefits of accessibility and earned interest.
A certificate of deposit (CD) is another secure option for short-term and long-term savings goals. These accounts combine the security of a guaranteed return with a higher rate and qualify for the maximum allowed deposit coverage from the FDIC. CDs can be opened online and set up with flexible terms ranging from seven days to greater than 60 months. Learn more about how CDs work.
Money Market Savings might be the best fit for you if you want to earn a higher interest rate, like the convenience of check access, and plan to maintain a relatively high balance in the account. Federal regulation allows you to make six transfers or withdrawals from your account per monthly statement cycle, and your funds are FDIC insured. This may not be the right account if you’re just starting to save money, but it is a great option once you have $5,000 or more to deposit.
An IRA account could also be a great place to save if you are working toward a retirement goal. With Traditional IRAs, you are saving money pre-tax and are taxed upon withdrawal. In a Roth IRA, you save money after it has been taxed, meaning you will withdraw your funds tax-free once you reach retirement age. Learn more about IRA account options.
3. It's easy to open a savings account
While our banking center lobbies are temporarily closed to help reduce the spread of coronavirus, our drive-thrus remain open for regular banking business. Each of the savings accounts listed above can be opened by visiting an INTRUST banking center. You may also open a Regular Savings Account, Money Market Account, or Certificate of Deposit online.
If you are an existing INTRUST customer, we can open your account with funds on deposit in another personal account, or you may deposit cash or a check to open a savings account. Regular savings accounts can be opened with a minimum deposit of $100, and youth savings accounts can be opened with as little as $10.
4. Maximize returns on your stimulus or tax refund
For those who are receiving an IRS Economic Impact Payment (stimulus check) or a tax refund, if you do not have an immediate need for those funds to provide for living essentials, you can use that money to start your savings plan. Consider transferring all or part of the IRS payment into a savings account to earn interest and be easily available for future use.
5. FDIC insured means your money is safe in the bank
If you are concerned about the safety of your money in a bank, rest assured that INTRUST has protected deposits for over 140 years. We have shown consistent financial performance through various economic cycles since our founding, and we have relied on our strength and stability to continuously weather economic downturns and market swings.
For added security, your funds are also FDIC-insured with INTRUST Bank. The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the U.S. government that protects you against the loss of your insured deposits if an FDIC-insured bank fails. FDIC insurance is backed by the full faith and credit of the U.S. government up to at least $250,000. For full details on what FDIC covers, you can find expansive information on their website.
The FDIC also provides a helpful tool online where you can calculate the insurance coverage of all types of deposit accounts you own. To evaluate your accounts, visit the FDIC's Electronic Deposit Insurance Estimator.
You'll never go wrong by building up your savings
Not only will saving today help you establish an emergency fund for unexpected expenses, you will also be better prepared for large purchases and future investments. Plus, having extra cash available is wise as we continue through a state of uncertainty with the stock markets and economic slowdown, but before making changes to your investments, remember to consult your personal financial advisor or tax consultant.
For more tips on how to set savings goals, save money, and teach savings habits to children, visit our financial education blog.
If you have questions about opening a savings account, you can reach us by phone at 316-383-1234 or 800-895-2265, Monday-Friday from 7am to 8pm and Saturday from 8am to 6pm.