Why You Need a Savings Account in Your 20s

Erin Monocle |

Your 20s are full of firsts. First job, first apartment, and maybe even your first big financial goals. But if there’s one financial step every young adult should have, is opening a savings account. A savings account doesn't just hold your money; they can help you build interest and lifelong beneficial financial habits. 

  • Builds a safety net for emergencies
  • Earns you interest (depending on what type of account you have)
  • Prepares you for bigger financial goals like buying your first house or car.

 

Types of Savings Accounts

 

Not all savings accounts run the same way. Here are a few of the best options to consider choosing.

  • Traditional- offered at most banks, they are easy to open but often have a low interest rate. They are good for beginners who want convenience. 
  • High Yield- Usually offered by online banks. Interest rates can be 10 times higher than traditional. Great for growing your savings faster. 
  • Credit Union- Community focused banks with lower fees. Sometimes they offer better rates than big banks. Ideal if you prefer a personal, local banking relationship. 

 

How to Start Saving in your 20s

 

Consider these tips to start up your savings account and how to maintain it!

  • Automate your savings- set up direct deposit or auto transfers from your checking account. 
  • Keep it separate- avoid temptations to spend the money. Only use it for emergencies or big life purchases. 
  • Increase over time- bump up the amount you put into your savings when you receive a raise or bonus. This can help to grow your account faster!

 

Final Thoughts about Savings Accounts 

 

Your 20s are a time of life for learning and figuring out what best works for your budget and lifestyle. For most young adults a high yield savings account could be the smartest option for growing your money faster. Have future readiness so that you can feel more confident about your future, whatever it may be. 

 

Remember, saving in your 20s doesn't have to be overwhelming. Start small, be consistent, and let your money work for you. Your future self will thank you!