Managing money can be a challenging task, and saving money could prove to be even more difficult. However, opening a savings account has the potential to help you with the latter. Knowing the best account to choose requires more thought than some people may realize. It’s important to research and be well informed about each savings account, and what they offer, such as: best interest rates, the minimum deposit requirements, and current specials. Below you will find some tips to use when you are choosing a savings account.
Maximizing Interest Rates
The interest rate on the account offered by the bank is typically what will help you decide the savings account option that is best for you. However, be sure to inquire of how long this rate applies. Often, banks will offer new clients an extremely high bonus rate to tempt them, but then the bank will lower that rate after a specific time period. Take some time and shop around before opening a savings account. Compare the savings rate between different banks to make sure that you receive the best deal!
Fixed Term
Even though you plan on saving your money, emergency situations do occur. You want to choose a savings account that does not require you to wait a specific amount of time before you can make a withdrawal, and or an account with a hefty withdrawal fee. Always check to see when you can access your money, and what fees are associated with withdrawing the funds. Check to see if there are notice periods when choosing a savings account. A notice period is XYZ and could typically range from 30-90 days. Always check before opening the account.
Convenience
Choose an account that works in your best interest. A few things to notice: Does the bank have ATMs nearby? Do they offer easy to use online banking? Is the bank available across the country? Does the bank have automated tellers, or can you speak with someone in-person? These are some of the questions that you should ask before choosing a savings account. If you want to speak with someone in-person, you should not consider opening a savings account with a bank that only offers interaction with customers via telephone or postal mail. Make sure the hours of operation are offered during the times that are convenient for you.
Minimum Deposits and Avoiding Monthly Fees
With some savings account options, there are minimum deposit requirements. This means that you will need to deposit a certain amount of money in order to open your account, and in order to maintain it. This could also be a factor in whether or not you have to pay monthly maintenance fees, or other additional fees. Sometimes the bank will require you to make a specific amount of deposits each month in order to qualify for the savings account option that you have chosen. Be sure to take this into consideration, especially if you do not plan on maintaining the balance, or making the required amount of deposits into your account each month.
Consider Placing Your Savings in More than One Bank
Often, there are savings account options at different banks that offer you something great. For example, some banks may offer you a high interest rate for the first few hundred dollars saved. Other banks may offer free you a free checking account, if you have a savings account attached. Either way, this could make it hard to choose between the two banks, which is why you don’t have to. There is no rule prohibiting you from placing your savings into more than one bank, therefore, consider it an option! Remember, the FDIC is free insurance that protects up to $250,000 in savings and checking accounts for each account holder. This protects you from unforeseen unlikely instances of bank collapse. You can always trust that you will have access to your money because it is protected by FDIC.
