Should you open a new savings account at the start of the year?
Opening a new savings account in 2022 has several important advantages.
The start of a new year is often a great time to reassess your financial goals and make cash moves that can set you up for a secure future. But you will have to be smart in the decisions you make because most people have little money and setting too many goals can be overwhelming and hurt your chances of success.
As the new year begins, it’s worth taking the time to consider whether opening a new savings account in 2022 should be on your to-do list. Here are some key questions to ask yourself to help you decide.
Do you currently have a savings account?
If you don’t have a savings account yet, you almost certainly should be opening one in 2022. This is true even if you’re paying off high-interest debt or working toward other financial goals. .
Everyone must have at least some money saved to cover emergencies. Without emergency funds, any unexpected expense could put you in debt. This is why it is a good idea to set up an emergency account even if you are working on paying off credit cards. Otherwise, you could find yourself trapped in a vicious cycle that undermines your progress and kills your motivation.
Your emergency fund should be kept in a separate savings account, rather than your checking account where it is more likely to be spent. If you don’t have any savings, open an account in 2022 and start working on building at least one mini emergency fund to give yourself financial peace of mind.
Are you maximizing your earned interest?
If you already have one or more savings accounts, opening a new one in 2022 might still make sense. This might be a good idea if you’re not currently earning a lot of interest on your existing account.
The interest rate on high yield savings accounts can be much higher than on standard savings accounts that your local bank or credit union may offer. And the rate offered to you can vary widely from one high yield account to another.
It’s worth researching savings account options to find a bank that will pay you the best possible rate so that you can maximize the money your savings earn you.
Do you have new financial goals to accomplish?
Finally, if you have new financial goals you’re working towards, opening a new savings account might be a good idea.
It helps to have a different savings account for each goal you are trying to achieve. This can allow you to maximize the chances of being successful in reaching your goals because you can more easily tell if you are making good progress. You can also set up automated transfers to each savings account to make sure you hit each goal as planned. And you’re less likely to withdraw money from an account for other uses if it’s earmarked for a specific purpose.
A savings account may be the best place to put the money you’ll need two to five years from now, because you can earn interest without taking on the risks associated with investing in the stock market. So, if you have short-term goals that you aim to achieve from next year, opening a new savings account might be a good first step.
If you’ve decided to open a new savings account, be sure to research your options carefully and find an account that makes it easy to transfer money, pays you a reasonable interest rate, and meets your other needs. Then start funding it as soon as possible in 2022 so you can get on the path to a better financial future.