5 Tips When Choosing A Savings Account
saving and spending (Photo credit: 401(K) 2013)
Looking for a new way to save? Or maybe you’re just concerned that you’re not getting the best deal with your current bank or credit union. Here are five things to consider before opening, modifying or switching your savings account.
1: Interest
The first thing you should consider about any account is how much and how often it earns interest. What rates or percentages are offered by the bank? Do they pay over a set time period or for certain balance amounts? Will rates increase as your balance does?
2: Institution
Even if you’re only using the company for your savings, it’s important that you trust their security and agree with their policies. If they have unfair clauses or lax privacy rules in other areas of their banking, it isn’t a stretch to think that these worrying practices might one day drift into their saving options.
3: Fees
Some accounts come with charges for things like low daily balances or transfers into your checking account. Others may only allow a certain number of withdrawals from your savings each month. Before you hand over your money, make sure you understand the circumstances under which you’ll be allowed to access it.
4: Perks
In the interest of attracting fresh faces, many financial institutions offer their customers the chance to earn additional savings through special accounts or tax advantages. For example, they might have exclusive promotions on retirement savings plans or investment opportunities with the chance to earn dividends.
5: Type
No two savings accounts are alike. Basic accounts are low-cost but low-yield; more advanced accounts may require bigger investments but offer higher interest rates in exchange for your commitment. There’s no “right” answer when it comes to choosing between them. You simply have to evaluate your needs and decide on the most fitting account for you.
These are just five things to keep in mind when trying to decide between savings accounts. Since they usually involve more money and tighter security measures than regular accounts, it’s important that you feel completely secure in your chosen bank or credit union. Use these tips to make a good decision and keep your paychecks safe.
Category: Budget, Financial Planning, Saving Money
