Choosing the Best Savings Account

by Susan Paige
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You might have finally decided to get yourself a savings account at one of the banks in your area. This will allow you to earn interest on the money that you have deposited. There are many people who do not put much thought into their selection of a savings account. However, this is a huge mistake on their part. Taking the time to compare the savings accounts that are available to you will pay off in the future. It is always a good idea to know what your options are. Here are some tips that will assist you in selecting the ideal savings account.

1. What sort of interest rate will you get if you open the savings account?

The primary purpose of opening a savings account in the first place is to allow your money to earn a higher rate of interest than it otherwise would in a traditional checking account. Learn more about checking vs savings account. However, not all banks will give you the same interest rate for a savings account. On the contrary, you will discover that savings account interest rates have a tendency to vary greatly depending on the bank that is offering it. This is why it would be in your best interests to spend some time on the phone and call many of your local banks. Ask them what interest rates they are currently offering on their savings accounts. Doing some research will help you find the best savings accounts currently available in your area. There are also banks that give checking account promotions so it won’t hurt checking those too.

2. Be certain that you open a savings account that is insured by the FDIC.

You always need to be certain that the bank you are thinking about doing business with insures all of their savings accounts with the Federal Deposit Insurance Corporation. This is very important because it will guarantee that all of your money will be returned to you in the event that the bank you choose goes out of business. This type of insurance is good for accounts that contain a maximum of $250,000.

3. What sort of fees does the bank charge?

You need to make sure that you have a complete understanding of all the various fees that you will be responsible for paying if you decide to open a savings account. As with the interest rates, the fees that banks will charge can be very different. For example, some banks will charge a fee if your balance is less than a certain amount. Other banks will have no minimum balance fee. Many banks are encouraging their customers to have their statement sent to them by email. They are doing this by charging a fee to have a paper statement sent to your home by the postal service. Fees might be charged for exceeding a certain number of withdrawals in a one month period of time. Transfer fees might also apply.

4. Consider opening a high-yield savings account.

The main advantage of opening a high-yield savings account is that fact that you will earn much more interest than a regular savings account. However, it is common for high-yield savings accounts to have a minimum balance requirement that is much higher than a regular savings account. Online banks are a good place to look for this type of savings account. This is because online banks have few expenses than regular banks. Therefore, they often pay more interest.

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