TMCC Financial Literacy Guide

15 Opening a savings account also marks the beginning of your relationship with a fnancial institution. For example, when joining a credit union, your “share” or savings account establishes your membership. A savings account is an excellent place to store cash for fnancial goals or emergencies safely and separately from the money you use for ongoing expenses. Here are a few pros and cons of savings accounts: • Pros: A good frst bank account for kids or teens or an account for adults looking for a place to earn interest on savings or place cash they would otherwise be tempted to spend. • Cons: Savings accounts often yield a lower interest rate than money market accounts and CDs. They don’t come with a debit card for purchases. However, if your savings account is at the same fnancial institution as your checking account, your bank may allow you to use your debit card for ATM withdrawals to be taken out of your savings account. Additionally, some banks may limit the number of withdrawals a consumer can do per month from a savings account. Savings Account Tips • If local banks or credit unions are too expensive, look at online-only options. Online savings accounts often pay the most interest and charge the lowest fees. • To build your savings account , deposit a lump sum of cash into an account to start with, or set up automatic monthly deposits into your savings account. Checking Accounts Checking accounts are used for everyday spending. The key feature of this type of bank account is a linked debit card you can use for purchases, ATM withdrawals, and usually includes check- writing abilities. This account type also allows you to deposit cash or checks and pay bills. Most banks now ofer online bill-