Do you believe in savings accounts?

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The humble savings account isn't exactly having its greatest moment these days. In the United States, at least, interest rates are tumbling and even high-flying online banks have been forced to make their high yield savings accounts a lot less high yielding. This illustrates the greatest weakness of the savings account: interest rates change like the wind, so you'll never know what you'll earn. That said, I personally still have a savings account. Do you? I still believe it's worthwhile to have some of my money earning interest yet be very available to me. Probably the biggest strength of the savings account is that it offers good liquidity while still earning you interest. If you really need money, you can dip into your savings without hassle and without incurring severe penalties. The other nice thing about savings accounts is that they often don't have minimum balance requirements; mine, for instance, doesn't. I began it with an initial deposit of $25, but could have started in with one buck. So you might be able to start earning interest with a savings account even if you have very little money to save. That's simply not true for most financial instruments like CDs and bonds (savings bonds excluded). The idea of locking in a nice interest rate is undeniably appealing, however, especially in uncertain times. My parents for instance tended to keep most of their money in CDs but also kept a good portion in their checking account to deal with expenses expected and unexpected. They didn't bother with savings accounts, at least not when they were older and weren't living paycheck to paycheck. I may follow in their footsteps eventually, but for now I still like my savings account!