5 Tips for Choosing the Best Savings Account for Your Needs

by Susan Paige
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Is your account balance dwindling as we speak? If you haven’t already, it’s a good idea to compartmentalize your money by getting a savings account. These accounts usually allow you to collect interest on the money you’re saving, so you end up with even more in the end. Even so, not every savings account will be right for every person. Here are five tips to help you choose.

  1. Ask about interest. Your usual bank has no questions about your savings account eligibility, so it seems like a good idea to just go with them, right? The truth is, you should wait on making that decision. Ask what the interest rate is and compare that to at least three other banks. After all, we want to make a little money while we save it.
  1. Compare the best interest rates to their fees. Above all else, you must be aware of this little trick financial institutions pull with savings accounts. Often, there will be monthly fees associated with the account. Compare what a year’s worth of those fees would be with the amount of interest your savings will have gained within the same timeframe. In some cases, the cost of your fees completely eliminates any financial benefits you would have seen from the interest.
  1. Special features. Any good bank will be ready to show you how they stand out from all the others. Their special features may include enhanced security, which is of particular importance if you decide to choose an online bank without a brick-and-mortar branch. They may also offer tools to help manage the account, so you can budget and track your savings more efficiently.
  1. Accessibility. Some people need readily available access to their savings account. They may require online access, a certain number of free transactions, and more. Simply put, there’s going to be regular account activity. Yet many other people do not want open access; it’s too tempting to take from their savings that way. That’s a top reason many don’t get savings accounts at the same bank where they do check. Decide whether or not it’s a good idea for you to get a savings account you could theoretically dip into on a whim.
  1. Check credit unions, too. There are certainly a lot of advantages to using an online bank, especially the interest. However, the interest on savings at any bank can drop without warning. But with credit unions, they may climb back up again faster. Small, local banks do this to increase the likelihood that you’ll stick with that account and keep making deposits, so consider that if you’re worried about having that good rate drop. There will always be drops, but we want to feel confident it will bounce back up quickly.

Once you choose a bank, start setting goals. What do you want to do with the money you save? Some banks may even offer rewards for meeting your financial goals, so read all of the fine print, speak to a representative of each institution, and begin planning a more secure, stable future.

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