Listen, hustla’. Everyone needs a stash. Whether you are a high wheelin’ and dealin’ mobster or a soccer mom with carrot sticks and vitamin water for the team, you’ll want to save some cashola for a rainy day. If you’re a soccer mom, the mini-van might break down, and oh, however, will Johnniekins get to practice? If you’re a mobster, the Feds might be onto your game. You might need to high-tail it to the Mexican border before you get locked in the slammer with some more than unsavory people that you may or may not have put there over the years to – eh hem – bump the competition.

You could throw a few bucks in the ripped side of an old mattress. But how safe is that? And that’s not making you any money! Putting your money in a savings account can throw you a few extra dollars and protect you from the run of the mill hazards like fire, theft, or super hungry radioactive moth larvae that favor green materials (Nom nom nom.)  Let’s talk about what a savings account is and types of savings.

How it works

Savings accounts are a place to stash your money and gain interest, very low and sickly interest, but interest all the same. That interest is usually compounded daily and paid out on a monthly basis. Savings accounts may have a minimum balance, but account specifics depend heavily on where you open an account at and what type of account you open. These crazy bankers all have different requirements and features.

The Pros, Bros?

• Interest that will make you grin in satisfaction. Okay, it’s not an I-just-got-a-date-with-a-sexy-movie-star grin, but it’s still pretty nice. You generally get a better interest rate than checking, and you don’t really have to do anything other than let your money sit there and gain interest.
• It’s sweet having savings. Sometimes, it can be hard saving, but there inevitably comes a time when you either want or need a rather large lump sum of money. Maybe you want to go stretch out with a yoga instructor in Aruba, or maybe your car that had been barely hanging on finally bit the dust. Maybe you even got sick with senioritus, a very serious disease, and need to…lie around for the summer. Saving up some money can be a nice little cushion to make life easier.
• Reasonably good access is acceptable. You do not have the easy access you have with your checking account, but you aren’t supposed to. A savings account was meant to help people save. You can make unlimited withdraws from ATMs, tellers, or through the mail though. Taking twenty bucks from an ATM is okay, but batting your money between accounts like a ping pong ball is as taboo as chewing your toenails in front of people…alright, significantly less taboo. This is because the banks are investing your money. That’s how they give you a higher interest rate.
• The bank makes your money feel safe and warm. If bank is FDIC or NCUA insured, the money in your savings account is safe up to $250,000.

The Cons, Mon?

• Uncle Sam frowns at moving your money more than six times. Federal laws, however, limit you to six transfers per month, only three of which can be by check, draft, or debit card.
• Fees are the lion that eats your money gazelle. In theory, there should not be a whole lot of fees to eat up your money, but if you are getting charged fees for using ATMs that aren’t your banks or going transfer crazy, you are depleting the interest that you are making and may take away from your original balance. If you go over those six transfers, they are going to bite you in the butt with some fees, and there are possibilities for charges if you go below the minimum balance.
• Transferring takes time…like a snail crossing the street. We live in a society that wants it now. In a savings account, it can take up to four business days to transfer money from one place to another. This can be good if you want to keep yourself from depleting your savings into non-existence, but it can act as a pretty sore spot if you are stranded in Death Valley and the tow truck refuses to even consider dragging your car back to civilization without some mulla’ upfront. And no, he doesn’t care that your tires are literally melting to the pavement. It’s the price you pay. Granted, transferring between accounts within the same bank can take a significantly shorter amount of time, instantaneous in some cases.
• Unwanted minimums linger like a creeper around higher interest rates. Not all but some savings accounts have minimums. There could be a minimum balance of $1 or maybe $10,000. The banks’ll tell you upfront what the minimum is, but they’ll most likely charge you or close your account if you go below it. Keep this in mind when you are opening a savings account. You don’t want to rack up fees just because of a minimum.