Savings accounts are one of the oldest and most traditional financial products in any bank. For many people, the savings account is the very first introduction they have to the world of personal finance and money management.
It goes beyond putting money away in a bank at an interest rate or here are things you need to look out for when choosing a savings account:
1. Interest rates
The single most important attribute of a savings account is its interest rate. The problem is, interest rates attached to most savings accounts are frustratingly low, with many banks offering a minuscule interest rate of 0.01 percent.
But if you can find a higher rate, you might as well take it. They’re pretty rare.
2. LITTLE OR NO FEES
You’d think that with such low interest rates, savings accounts wouldn’t come with fees. But several banks do, indeed, charge fees to keep a savings account there.
There are banks who charge their customers outrageous fees; maintenance fees, withdrawal fees, activity fees, inactivity fees, monthly fees, analysis service charge fees, and almost any other type of creatively named excuse to take a portion of your cash away from you.
When you’re shopping for a savings account, be sure to pick a bank that doesn’t charge any unnecessary fees. These savings accounts are rarely worth the hassle.
3. No minimum opening deposit
Some banks require that you deposit a certain amount of money into your savings account when you open it.
But if you want more freedom to start your savings account with an even lower amount, you’ll have to search for accounts that don’t require any minimum opening deposit. Just make sure that these accounts don’t come with any other fees that might haunt you later.
4. Automatic transfers
Saving money isn’t easy. But if you can automate regular deposits into your savings account, you’re far more likely to save at least some money each month.
You’ll want a bank that offers automatic transfers from your checking to your savings account, and make sure that the bank doesn’t charge a fee for this service.
5. Easy withdrawal
Be careful not to use your savings account as if it’s actually a checking account. Federal regulations say that you can’t make more than six withdrawals from your savings account a month. If you withdraw more, your bank will charge you fees for each withdrawal.
Some banks might allow even fewer withdrawals every month. Look into a bank’s withdrawal policies before you take out a savings account with it.
You can also read the review on difference between a checking and savings account