Though many of us know that keeping our money in a bank is the usual thing to do, why do we do it? The answer to this question can be found in the history of the United States and the happenings in its economy. Before the stock market crash of 1929, many people had their money in banks, already. However, there was no such thing as insurance to prevent the loss of one's funds that were deposited in that bank. During the stock market crash, many people lost thousands of dollars because of the grave economic difficulties of that time. As a result of this, President Franklin D. Roosevelt set in motion what would become the FDIC of today. The Federal Deposit Insurance Corporation insures each person's account up to 100, 000 dollars. This is ample coverage for most accounts.
In addition to the checking accounts that we use for our everyday purchases, banks offer savings accounts to allow clients to store away funds for later use. These funds usually generate a small amount of interest while they remain in that savings account. One of the neat features of the system that allows your money to make money for you, is that the bank actually pays you interest on all of the funds in the account, no matter what the source of those funds. Therefore, the bank actually pays you interest on the interest that it already gave you!
These features of the savings account make it a reliable and safe way to save funds for any purpose that a person may wish.