Vault bank accounts are digital banking features that allow you to allocate money for specific financial goals. They are also known as sub-savings accounts, as you can earmark funds within your savings account. 

Vaults help you organize funds, allowing you to create separate buckets for each potential spending. Depending on your bank, you can send money to your vault from your checking, savings, or other external accounts. 

Here are some benefits of opening a vault bank account:

Prepare for Emergencies

Financial emergencies can occur at any time. It could be a missed paycheck, a damaged roof, or a medical bill. Planning beforehand is the only way to avoid stress and handle the situation. 

A vault bank account allows you to isolate a portion of your savings, making it less likely to be spent on unnecessary purchases. Moreover, this can help you reduce the temptation of spending money meant for emergencies. 

Save for Financial Goals 

Financial goals typically take a long time to achieve. Unplanned family expenses, temptation to spend, lack of structured budgeting — anything can get in the way. A vault bank account can help fast-track this process by categorizing. 

As mentioned earlier, a vault account allows you to make vaults for each financial goal. You can create separate vaults for:

• Holiday gifts
• Vacation
• House down payments
• Car down payments
• Retirement planning

You can track your progress and make adjustments accordingly. With a vault bank account, you don’t have to manage multiple savings accounts, ensuring streamlined savings. 

Benefit from Automatic Savings

Most financial institutions and online bank vault service providers allow you to automate savings. With recurring transfers, you don’t have to worry about sending money to your vault account every month. You can choose a percentage and put the vault on automation. 

Some automated vault bank accounts also offer interest, growing your money over time. 

Boost Motivation

Building an emergency fund and saving for a future expense is difficult. You can be tempted to dig into the savings, thinking it won’t make much of a difference. Remember that consistency is the key to increasing your savings, and vault accounts can be of immense benefit. 

With vault accounts, you can easily see how much progress you’ve made after months of saving. This will give you a motivational boost and help you achieve a sense of financial security, encouraging you to keep saving. 

Easy Accessibility to Funds

Most vault accounts also have advanced features, which allow you to access the funds almost instantly in case of an emergency. Simply tap into your baking app and transfer funds from your savings vault to your main account. 

Moreover, your savings will be insured by the Federal Deposit Insurance Coverage (FDIC). The FDIC insures deposits at most commercial banks and savings associations, protecting depositors against losses of up to $250,000. Keeping money in a vault bank account means having peace of mind. 

No Minimum Balance

Most people hesitate to open a vault account, thinking they don’t have enough funds to begin. The reality is vault bank accounts don’t have a minimum balance requirement. You can start with as little money as you’d like and work your way upward.