How can you find the best savings account rates to grow your money? The best thing you can do is to focus on comparing savings account interest rates with several banks to see what type of offers banks are willing to give to you. A savings account provides you with a great place to hold your money so you have funds to rely on in emergencies. However it has long been known that interest rates on savings accounts have not been as high as other investments. Using a savings account by itself to save for retirement is a terrible decision since the money will barley have a chance to grow over the years. Always consider investing your money into a Roth IRA or Roth 401(k) in order to really build up a strong retirement account.
Why Use A Savings Account?
The savings account interest rate is the main reason why you want to hold your savings in a bank versus leaving your savings in a piggy bank on your nightstand! At least in a bank it will be earning something. The interest rate is low but it does pay annually and you will be able to build up a nice nest egg if you continue to contribute money to your savings account. The interest rate on your savings account will be based on the bank that you choose to work with and how much money you are contributing to the account monthly.
Opening A Savings Account
The most important decision you will need to make when you are planning to open a savings account is to select the right bank to work with. The best banks are going to offer the best savings account rates along with low fees. When you meet with a bank to open a savings account there will be several things that you need to discuss with the bank including the following:
- Is there a minimum balance requirement?
- Is there a monthly deposit requirement?
- Are there fees to keep the account open? How about fees for transfers and withdrawals?
- Can you transfer funds from the savings account to your checking account or other bank accounts immediately? How soon will the money be available for use?
- Does the bank provide you with online account access and mobile banking?
- How can you pull funds from the savings account? Can you use an ATM card and will you be charged for using an ATM?
Important Things To Know
When you are shopping around to find a high interest rate on a savings account you must also consider a few other things about the way in which you save. Are you planning to transfer funds to the account monthly or will you put money into the savings account when you have some extra spending money? This is important as some banks will actually CLOSE your savings account if you do not make a deposit for a year. Always make sure you are contributing to the savings account in order to keep the account active but to take advantage of the interest rate that you can make on the money you deposit.
If you are a person that tends to move money to the savings account and then moves it right back into your checking account to spend it, a savings account may not be the best option. The purpose of the savings account is to actually SAVE money! Plus you do need to be aware of the fact that the government does track withdrawals on savings accounts and in some cases your account could be frozen for too many withdrawals from the account.
As you shop around for the best savings account rates you might find that there is a bank that seems to be offering higher rates from all the others. Check the account fees and other things to make sure you won’t end up paying more just to save your money. You must also check the history of the bank and to find out if it is insured by the FDIC or not. Banks that are not FDIC insured are a higher risk to investors as you could lose all your money if the bank fails.
How Do I Find The Best Savings Account Interest Rates?
In order to find the best rates you want to shop around. Using online comparison tools as they can provide you with a snapshot of the interest rate and account fees offered from several banks. You also need to check with local banks as well as your online banks. The online banks may be able to offer a slightly higher interest rate because they do not have as many physical branch locations to operate, keeping their costs lower.
Opening A Savings Account For My Child
Many banks will offer student savings accounts or will allow parents to open savings accounts in the name of their children. This is a great way to start teaching your children financial responsibility and accountability. It is also a great way to transfer money to your children’s account for their weekly chores and to show them how the money in their account will earn even more money by staying in the account. Typically the parent will need to remain linked to the savings account until the child turns 18.
Why A Savings Account Over Other Accounts?
If you are looking to save your money for a long period of time it may be a smart decision to consider other accounts like money market accounts or Certificate of Deposit accounts. The interest rate on these accounts will be higher. The main reason for using a savings account is because it is a liquid account, meaning you have quick and easy access to the money. This way you can lean on your savings when you need the money immediately instead of turning to credit cards or loans. Financial planners recommend that you try to put away 6 months of your salary into a savings account to use it in the event that you do have a financial emergency. Since it is a smart decision to have money set aside into an account like this it helps o research the best savings account rates to give you even more money in your “rainy day account!”