Low Yields

• Savings accounts provide absolute safety, but they are not known for their high interest rates. When determining whether or not a savings account makes sense, look at the yield vs. the benefit. If you are looking to save money over a long period of time, you might be able to earn more on your money by purchasing a certificate of deposit rather than leaving the money in a low-yield savings account. Your money will still be safe, but you will earn a better rate of return.
  
  

Good Starter Account

• A savings account is the perfect way to introduce children to the concept of saving and investing. Parents can go with their kids to the bank and help them get started for only a few dollars. Once the kids get the idea, chances are they will want to learn more about saving and investing, and about the free money known as "interest." That makes a savings account the perfect starter vehicle for young people, and for adults who need to get a jump-start on managing their money wisely.
  
  

Inflation

• In the end, it is not the total amount of money you have that really matters. It is the purchasing power of that money--in essence, how much that money can buy. If you stash all your money in a low-yield savings account, the account might grow over time but still lose purchasing power. For instance, if your account earns 2 percent a year but inflation averages 3 percent a year, the money you have in the account will buy less than when you first put it in the bank.
  
  

Safety

• Safety is an important consideration, especially if you have the money earmarked for a specific purpose. If you are saving money to make a down payment on a home, pay for a new car or put a new roof on the house, you cannot afford to put that money at risk. Investing that short-term money in a savings account is one of the best ways to keep it safe. Since the safety of the principal is the biggest concern, any interest you earn in the meantime can be considered a bonus.
  
  

Low Balance Requirements

• Many savings accounts impose no minimum balance requirements at all, meaning you can keep as much, or as little, as you want in the account. That makes it easy to set aside money as you find it, and over time you can build a solid emergency fund that way. You can also set up a direct deposit directly into your savings account, putting your savings on automatic and forcing yourself to put money aside.