Having a savings account can be essential! It's the best place to store your emergency fund or stash your money until you save enough to buy a car. But every savings account is different. Here are some tips you should take into account before opening one! Plus, if you already have a savings account: are you making the most of it?
If you are willing to open a savings account, then you should know that there are some factors you need to consider beforehand. Take note of these steps and start searching for the best savings account.
What to check before you open a savings account
1. Interest rates: This is the main factor you should analyze while considering savings account options. The thing is that interest rates aren't usually too high in this type of account, so you won't be growing your money in a short period. If you are deciding between two or three options, the best thing would be to go for the one that offers a higher interest rate.
2. Monthly fees: Several banks charge monthly fees to savings account, although in many cases you can keep a minimum balance to avoid those fees. So, while you are searching for the best bank to open your savings account at, check that your options don't involve any monthly fee.
3. Minimum opening deposit: Another factor you should check before opening a savings account is they require a minimum opening deposit. Many banks will ask you for a deposit for opening your account, but you should definitely look for those that don't!
4.Automatic transfers: Search for those banks that offer this feature. This will automatize your deposits from your checking to your savings account and help you save a fixed amount of money every month.
5. Mobile check deposits: This feature will help you avoid going to an ATM or bank branch to deposit your check. Before opening a savings account, ask the bank if they allow mobile deposits. Although it's a rare feature, many banks are starting to apply it.
6. Easy withdrawal: Although you may not be withdrawing frequently from your savings account, you may want to check if you will have quick and easy access to your money. Remember that the Federal regulations only allow a maximum of six withdrawals from your savings account a month.
MAKE THE MOST OUT OF YOUR SAVINGS ACCOUNT
If you have your money in a savings account, you are one step ahead. This means you’ve started to save your money in a safe way. But is it the right account for you? A study published in 2016 showed that 69% of Americans weren’t putting their money in a savings account, so if you are doing it, you are ahead of most U.S. adults.
But, you might not be making the most out of it. Here you will find some considerations for you to find out if your account is the best option for you:
1. Your bank is charging fees
As a savings account does not pay much interest, banks shouldn’t be charging fees either. But a lot of them do. The most common is the maintenance fee, but it can easily be waived if you keep a minimum amount of money in the account at all times. Depending on your bank, this minimum amount can range from $100 to $1,000.
Another way they charge you is by exceeding the free amount of transactions you get every month, which is usually 6. These transactions can be withdrawals or transfers and they can charge you as much as $10 per each additional move. As there are plenty of banks that will offer a savings account without these fees, your best shot it to check with your bank and see what they offer.
2. Not enough interest
Savings accounts don’t pay much interest, but some of them pay a bit more and some, a bit less. Higher interest rates are around 1%, so you must know what your current interest rate is so you can make an informed decision. It's not like 1% interest is going to make you rich, but if it is a bit more than usual, then why not take the opportunity?
3. Online banking options are limited
An important thing to consider when deciding if your savings account is the right for you is whether or not your bank offers a convenient online platform. If the platform is user friendly and allows you to perform a lot of transactions without you having to actually go to a branch, that’s a plus.
You should be able to log into your account from your computer or phone and quickly transfer money between your accounts. Some banks even offer the option of mobile deposit, which allows you to take a photo of a check and deposit it in your account straight away.
As the financial reward you get from a savings account is very little, you should make sure that they are not causing you any inconvenience. Keep this things in mind when deciding and always check with your bank!