A savings account is an interest-bearing deposit account with a (typically) fairly low interest rate. Savings accounts are a safe place to store money needed for short-term goals. Due to the lower returns offered by savings accounts, they aren’t generally appropriate for long-term retirement or savings goals. Saving appropriately for short-term goals sets you up to save/invest properly in long-term goals like retirement, without using costly debt from credit cards or other loans.
“Never spend your money before you have it.” — Thomas Jefferson
All your financial accounts should have a purpose. Saving for a downpayment, a vacation, or some other want or need. Your first and primary savings account should be an emergency reserve account. This account is designed to give you access to cash should you experience an emergency. Many financial advisors suggest saving 3-6 months of your current salary. Once your emergency reserve account is fully funded, you should allocate funds toward your retirement accounts then other long and short-term financial goals.This should help achieve your financial goals while avoiding the costs and stress of unnecessary debt.