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The venerable bank savings account has been a "go-to" personal financial tool for Main Street Americans for over a century, although the actual history of savings backs dates back to 18th century Europe, where Germany, Switzerland, and France all had early versions of savings banks.

Perhaps the "first up" nod should go to England, where the idea of savings banks dedicated to the general population first took hold, reportedly as early as the 1690s.

It wasn't until the early 1800s when the first savings bank popped up on the American landscape. In 1816, the Provident Institution for Savings in the Town of Boston first incorporated, followed by the Philadelphia Savings Fund Society in 1819. Soon after, savings banks appeared in Baltimore, Hartford, Providence, R.I., and New York City.

The model behind the savings bank, and its flagship product, the savings account, hasn't changed all that much 200 years later. Bank customers deposit money, the bank pays them a small rate of interest for the business, and hopefully, the savings account and the customer prosper over the long haul because of the arrangement.

There is a caveat with bank savings accounts in the 21st century, especially as competitive financial services products have emerged that pay consumers more interest to hold their money. These days, bank savings rates are a pittance, with the average bank savings account interest rate mired at a meager 0.09% in early 2019.

That factor alone begs the question - what are savings accounts and are they really worth the low payout rate to continue using them?

Here's a closer look - afterward, decide for yourself whether bank savings accounts work for you.

What Is a Bank Savings Account?

A bank savings account is exactly what it claims to be - a secure vehicle that financial consumers can use to save money, while earning modest interest from the bank or credit union in the process.

The need for some type of bank savings account is strong. By placing money into a savings account, you're in effect creating your own rainy-day or "emergency fund" where you'll have the cash on hand necessary to pay for a household financial crisis, like for a major auto repair expense, a hospital stay not fully covered by insurance, or a job layoff.

How much should you keep in a bank savings account?

That's a fair question, and one that is best answered by your own unique personal financial circumstances. By and large, though, financial experts advise keeping three to six months of living expenses in your savings account - that should be enough to tide you over until the financial emergency abates.

Bank savings accounts also build a wall between your assets, sectioning some money off from your regular spending and bill-paying accounts, and keeping it in an account where it can grow uninterrupted.

Bank savings accounts also vary in terms of interest rates, fees, and access to the account, savings accounts across the board also have major commonalities.

Are Savings Accounts Secure?

Bank or credit union savings accounts of up to $250,000 are federally insured by the U.S. government. That means if a bank folds, like many did during the Great Recession, your account money up to $250,000 will be guaranteed, either by the financial institution that takes over a failed bank, or by the federal government itself.

What Are Account Options on a Savings Account?

Most banks and credit unions have several common types of savings accounts:

1. Traditional Savings Account

This is the most popular savings account. It's fairly basic, paying out interest savers, and giving them the instant ability to take cash out of the account, as needed.

2. Money Market Account

This type of bank savings account comes with stronger limitations, like higher account balance minimums and higher fees, but they pay out more in interest and also provide check-writing options, which regular bank savings accounts don't provide.

3. Certificates of Deposit

Here is where bank savings accounts get esoteric. Certificate of deposits (CDs) offer higher interest rates relative to basic savings accounts (the average CD rate of return stands at about 2.80% these days), but they do curb your ability to access funds, and come with early withdrawal fees if you take money out of the account before the agreed-upon "term limit."

How Often Can You Withdraw From a Savings Account?

Under U.S. law (called "Regulation D"), savings account consumers can only take out or transfer funds from account to account six times per month. That's because Uncle Sam - and the bank or credit union - wants you to keep your savings as savings, and not used as an automated teller machine.

Many banks don't count ATM withdrawals against the withdrawal limit, but if you exceed the government-allowed withdrawals, you may incur a fee, or have your account closed outright if you're a habitual savings account vacuum.

How to Open a Savings Account in 4 Steps

The good news is that opening a bank or credit union savings account is easy-peasy. Use these steps to expertly open a savings account:

1. Select Your Bank or Credit Union

Chances are, you already have a regular bank. If so, start there, as you already have a relationship with a bank and you'll be first in line for special perks and benefits (like a higher rate of return!)

If not, thoroughly review and research your banking options. Focus on interest rates, minimum deposit amounts, access to a branch near you, digital services and options (having a mobile app is a plus), and good customer service and ample banking hours at physical branch locations.

2. Select an Account

Review the types of savings accounts listed above - traditional savings, money market account, and certificate of deposit account - and choose the one that works best for you.

For example, if you're not into withdrawal limits and early withdrawal fees, then a certificate of deposit may not be for you. Alternatively, if you're into a good rate of return, a traditional savings account with a weak ROI is best avoided.

3. Fill Out the Forms

These days, opening a new bank account can be done online or via a mobile app. Or, if you're in the neighborhood, stop by your local bank branch and fill out the correct forms.

A bonus: if you're on site, you can easily ask a customer service staffer (or even the branch manager) any questions you have on your savings account selection. Ask about any fees and account limits, along with any minimum amount mandates. Don't sign on the bottom line until you get the answers you need.

You'll need to be at least 18 years old, and will require a driver's license, passport or other legitimate form of identification to open your savings account.

4. Start Saving

Now, your job is to park as much money as you need to build that savings fund. Start with a good amount - $500 is realistic and ideal, but even parking $100 in your savings account is a good start.

How Much Do Americans Stash in Savings Accounts?

Americans do still put money into bank savings accounts, and it's not a trifling amount despite the paltry interest rate payouts.

In early 2019, the median U.S. savings account holds $5,200. The amount Americans stash in savings accounts is on a sliding scale, by age. For example, bank savers under the age of 35 only have an average of $1,580 in their savings accounts, while seniors over the age of 75 have $11,000, on average, in their savings accounts.

That's because younger Americans earn less, and are more likely to put extra money to use paying student loan bills or saving for retirement in a 401(k) or IRA plan at a greater rate of return. Anything left over can go into a savings account.

Older Americans, on the other hand, have likely paid for their homes or have retired and are in capital preservation mode, keeping a sharp eye on every penny. Under that scenario, a savings account is helpful - it's liquid, easy to manage and track, and usually comes with the security an older American has been using for years, if not decades.

Savings Accounts Tips for Main Street Bank Customers

Now that you've started saving with your account, look for some perks, loopholes and creative strategies to get the most from your savings account. Try these ideas on for size:

  • Establish savings goals. Test yourself early and set specific savings goals. Aim for a specific amount each month - say, $250 - and go from there.
  • Play the percentages. It's easy for your bank to move a set percentage of your checking account into savings. Just set a figure - 10% should be doable, in most cases - and have it moved from checking into savings. After that, just set it and forget it.
  • Aim for a higher yield. You may have to put more money into your savings account, but many banks will reward higher account balances with higher bank yields. Ask your bank if you can play the higher balance/higher yield game, too.
  • Set "fun" goals. Once your savings account is up and running, establish some fun savings goals, too. For example, if you're planning a big summer vacation in Europe, keep putting money away well in advance - say $200 every month for one year.

Then, every month, add 10% to your next monthly round of savings. Do that and your money will grow faster than you think.