With tax season in full swing, many people will be receiving a refund after filing their returns. While it may be tempting to go spend that cash on frivolous items that bring you joy in the moment, consider tucking that money away into a savings account. There are countless benefits to having a personal savings account and we’re breaking down the top three reasons below.
1. Start or build your emergency fund
The importance of an emergency fund cannot be overstated. We all know that unexpected expenses pop up – from unforeseen car repairs to emergency medical bills, and even sudden unemployment. Experts say that ideally, you should have six to 12 months’ worth of living expenses stashed away for unpredictable events. If you receive a tax refund, regardless of how much, this is a great way to start your emergency fund or add to an existing account. According to the IRS, the average tax refund is $2,893 as of April 2021. Think about how much peace of mind you could have with over $2,000 tucked away, specifically for emergency situations.
2. Grow your money with competitive interest rates
When you open an account with Live Oak Bank, you can trust that your dollars are earning money, not just sitting idle. With competitive interest rates, there are no minimum balance requirements for savings accounts and the online opening process is simple. If there are any roadblocks, our North Carolina-based customer support team can help guide you through the process.
3. Work towards long-term savings goals
Emergency funds are imperative for unexpected happenings, but it’s also wise to intentionally save up for costly items you know are coming your way. Think about expenses like a down payment for a home or car, college tuition for your kids or even your retirement nest egg. Even if you tuck a small amount into a Live Oak Bank savings account – that’s something! If you do receive a tax refund, tucking it away is the first step in your long-term savings strategy.
