Twenties Economics | Savings Account

Hello Everyone,

I hope all is well!

As a university student, it's essential to begin building good financial habits early on. One of the best ways to do this is by opening a savings account. A savings account can help you save money for emergencies, future expenses, and long-term goals. In today’s episode we will discuss the importance of having a savings account and which ones that all university students should be caring about as well as where and how to start with building them! So, without further adieu let’s get into it!

So what is a savings account and why should I care?

University students should care about starting a savings account because it can help them save money for emergencies, future expenses, and long-term goals. A savings account can also help students build good financial habits early on, such as budgeting and saving regularly. By choosing the right type of savings account and the right financial institution, university students can maximize their savings and achieve their financial goals.

Savings Accounts that All University Students Should Have

Long-Term Savings Account

A long-term savings account is a type of savings account (which is the one that many of us have heard of) is designed to help you save for larger, long-term goals such as a down payment on a car or a house, or for retirement. This type of account typically has a higher interest rate than a traditional savings account, which can help you grow your savings more quickly. There are several different types of long-term savings accounts. Some options for long-term savings accounts for university students include high-yield savings accounts, Roth IRAs, and 529 plans. It's important to research and compare the features and benefits of each type of account before choosing one that fits your needs and financial goals.

A High-Yield Savings Account

A high-yield savings account is a type of savings account that pays a higher interest rate than a traditional savings account. This type of account is ideal for university students who want to earn a little extra cash on their savings. While the interest rates on savings accounts are relatively low, every little bit helps, and a high-yield savings account can help you build your savings more quickly. Some good options for high yield savings accounts include Discover Bank and Marcus by Goldman Sachs.

An Emergency Savings Account

An emergency savings account is a type of savings account that is specifically designed to help you save money for unexpected expenses. This account should contain enough money to cover at least three to six months of living expenses. This way, if you suddenly lose your job or suffer an unexpected expense, you'll have the financial cushion you need to get through it. An emergency savings account can also be a high-yield savings account. A high-yield savings account typically offers a higher interest rate compared to a traditional savings account, which means that your money can grow faster over time. By using a high-yield savings account as your emergency fund, you can earn more interest on your savings while still having quick access to your money in case of an emergency.

To build an emergency savings account, university students can start by setting aside a portion of their income each month. This can be a small amount, such as $5or $20, or maybe even $50, that is automatically transferred from their checking account into a savings account. Over time, these small contributions can add up and create a solid financial cushion for unexpected expenses. It's also important to avoid dipping into this account for non-emergency expenses, such as entertainment or dining out. Instead, students should use it only for true emergencies, such as unexpected medical bills or car repairs or rent.

Online savings accounts and credit union savings accounts are good options for university students looking to build their emergency savings account. These types of accounts typically offer higher interest rates (which is what we want!) and lower fees than traditional savings accounts. Some specific options to consider include Discover Bank and Marcus by Goldman Sachs for online savings accounts, and credit unions in your local area for credit union savings accounts. It's important to research and compare savings accounts before choosing one, taking into account factors such as interest rates, fees, and accessibility.

Which Savings Accounts are Best for University Students?

As a university student, you'll likely be living on a tight budget, so you'll want to choose a savings account that offers the best interest rates and the lowest fees. Here are some of the best savings accounts for university students:

1. Online Savings Accounts

Online savings accounts are a great option for university students because they typically offer higher interest rates than traditional savings accounts. They also often have lower fees, making them an affordable option for students on a budget. With online savings accounts, you can manage your account from anywhere with an internet connection, making it easier to keep track of your savings.

2. Credit Union Savings Accounts

Credit unions are non-profit financial institutions that are owned by their members. They typically offer lower fees and higher interest rates than traditional banks, making them an excellent option for university students. Credit unions often have a focus on community and may offer additional benefits such as financial education resources.

3. Student Savings Accounts

Many banks and credit unions offer special savings accounts specifically designed for university students. These accounts typically have lower fees, higher interest rates, and other benefits such as free checking accounts and ATM access. Student savings accounts may also have special features such as incentives for good grades or other achievements. It's important to research and compare savings accounts before choosing one. Look for accounts with low fees, high interest rates, and features that fit your needs. Consider factors such as accessibility, customer service, and ease of use.

I hope this helps!

All the Best,

LiyaElle KSco.