GLS MoneyWise logo

The Unexpected Benefits of Savings Accounts

In this topic, we cover:

  • How a savings account can play an important role in maintaining your monthly budget.
  • Ways that savings accounts can minimize or avoid banking fees.


Nest with gold egg in it.

When used as part of a financial management strategy, savings accounts can offer some unexpected benefits.

Many of you opened savings accounts as kids as a safe place to keep cash gifts or earnings from odd jobs. But a savings account can be a powerful tool for helping you manage your money, even as a college student or working adult.

Unlike a checking account, it’s usually not possible to write checks against your savings account balance. However, it is possible to access your savings with a debit card by either transferring the money from savings to checking or by selecting your savings account when making an ATM withdrawal. Debit card purchases will come primarily from a checking account.

Here are some good reasons to consider a savings account:

  • Automated Monthly Transfers - If you get a lump sum of money (for example, students who get money each semester from student loans), keep most of your money in your savings account and then transfer the amount you need each month into your checking account. Having to wait until the end of the month helps to limit your spending and makes sure you don't have to rely on credit cards when the lump sum is drained. You should also be able to set up automatic monthly transfers from savings to checking, making this strategy even easier to manage. Be mindful of any limits on the number of transfers from your savings. Federal laws limit the number of certain types of transfers that you can make from savings accounts and your bank may charge a fee and/or change your account type if you exceed these limits.
  • Avoiding Penalty Fees - By linking your savings account to your checking account, you can avoid courtesy overdraft fees of $35 or more per transaction in the event you lose track of your checking balance. The money will simply be transferred from your savings to checking to cover the charge as long as you have sufficient funds in your savings account. Though a “sweep fee” may be applied, any fee will often be less expensive than a standard overdraft fee.
  • Avoiding Monthly Fees - If you determine that a checking account with a monthly fee is the best deal for you, make sure you understand the conditions to avoid the monthly fee. For example, linking your savings account to your checking account may help you avoid fees if a combined minimum balance is required to avoid the fee.
  • Automatic Savings - If you earn a monthly income, automated monthly transfers from checking to a savings account will build you a nest egg and potentially save you money on waived fees from some banks.

Savings accounts are also a great place to keep an emergency fund – money that’s set aside to cover unexpected expenses. An emergency fund allows you to pay unexpected bills from cash, rather than relying on a credit card. It’s commonly recommended that working adults keep two or three month’s worth of expenses in an emergency fund.