When you start saving, this question might pop-up in your head. Is it better to keep cash at home or money in the bank? Well, the answer to this depends upon your financial goals. It is better to have a separate savings account to manage your financial goals. However, you can keep cash at home if you want to accomplish a short-term financial goal. It’s better to have a separate account for an emergency fund. An emergency fund should be accessed only when there’s an actual emergency. For example, not having enough money to opt for luxury isn’t an emergency. The emergency fund is for the things you can’t expect to happen in the due course of time. For instance, a health issue of any family member. Likewise, having specific savings accounts for specific financial goals helps you manage your money better. Let’s look at some of the options where you can keep your savings safe.

Brick and Mortar Bank:

A traditional Brick and Mortar bank could be your first choice for keeping your savings safe. It has branches that offer various bank accounts and has people to assist you in these. They also provide notary services. That means a notary public will verify your identity and signature in a document to make sure you are doing it willingly. It can be used as a safe deposit box and they offer one-to-one assistance. They can be a good option to get advice on finances. They also convert coins to cash. They generally provide a low rate of interest and charge higher depository fees. But, they lack modern features of online banks. If you are able to handle your finances online, still there are some valuable reasons to keep going to the bank.

Community banks, Online-only banks and credit unions:

These are known to have the least amount of depository fees. Online-only banks have low cost as they don’t have to pay for physical locations. They are also easy to access through the internet and from your PC or smartphone anytime, anywhere. This can be a well known option for emergency savings. Online-only banks also allow you to open sub-savings accounts to save for short-term financial goals like buying a phone, taking any subscription and going on a vacation. Having specific accounts for each goal makes it easier for you to accomplish it. They provide high-yield savings accounts.

Community banks are generally businesses owned by investors or stakeholders, while credit unions are not-for-profit organizations owned by customers. While banks are open to the general public, credit unions restrict their customer base to a certain group of people sharing a common goal. Credit unions also offer small business loans at lower interest rates. They offer slightly higher interest rates on deposits. However, Large national banks offer a variety of services that credit unions fail to provide such as mobile banking, ATM footprints etc.

Money Market Accounts and Certificates of Deposit(CDs):

If you are looking to save your money just for a few years then Money Market Accounts and Certificates of Deposit (CDs) could be the best choices. These savings accounts offer a higher interest rate than standard savings accounts. Both require a higher opening balance than a regular savings account. Money market accounts typically come with a debit card and allow a limited number of transactions every month. Money market accounts are generally insured by the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration(credit unions), so you won’t lose your money if your financial institution goes out of business. This can be a good option for your emergency fund, as funds here are more easily accessible than other savings accounts. So, in case of any emergency you can quickly access your funds. But in many cases banks pay similar interest rates as money market accounts. In such cases it would be better to stick with the bank as it’s likely to avoid high minimum balance requirements. CDs have fixed maturity dates. If you open one, you have to keep your money for a fixed amount of time. Withdrawing it before maturity can cause a penalty. So it’s advised not opt for a CD for emergency funds because it may cause you loss in case of early withdrawals.


Eventually, your financial goals will decide where you need to keep your money. If you’re saving for an emergency and instantly want to have it, then an online savings account will be the most appropriate option. But if you are saving for a long term financial goal then CDs will be appropriate. So, it ultimately depends on your needs. Keeping cash at home makes it easier to access. But it’s good for short-term financial goals. Sometimes, you have to wait. For instance, if you need to have a higher opening balance. Otherwise, it’s always a good idea to go for a savings account as they let you earn interest on your deposits. You can go for specific services according to your needs.

About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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