How to Choose a Savings Account That’s Right for You

March 5, 2017

Need to choose a savings account, but aren't sure what to look for? I've got some helpful tips to make the decision an easy one.

Back in the ol’ days, before the Internet came along and saved us from the likes of reading real books and having actual, in-person conversations, there weren’t a whole lot of options for savings accounts. Generally, you chose a bank as close to your home as possible, since deposits and withdrawals required a trip to a branch.

Now, the world is quite literally at your fingertips, yet with that freedom comes a myriad of decisions and choices to make. This is especially true if you are trying to choose a savings account that’s right for you. Before signing up just anywhere, consider these tips for picking a financial institution.

Interest Rate

Just like when you borrow money from a bank and have to pay an interest rate, banks should do the same for you when they have your money just chilling in their vault. Now, you aren’t going to get rich on interest rate payments, regardless of how competitive the bank is with their percentages, but it is absolutely something to consider when deciding on a financial institution.

Rates can vary a lot between banks, and generally the online based institutions that lack physical locations, pay more than banks with brick and mortar branches. If you are ok with that, an online bank may be the way to go.

ATMs

Do you anticipate using an ATM often for withdrawals, or even deposits? Before signing up for an account, you may want to use scope out the nearest ATM that services your bank for free. In addition, if you travel a lot, it may be important for you to have a nice distribution of ATMs all over, not just local to you.

Minimum Balances

Generally, the more competitive the interest rate, the higher the minimum deposit and/or balance required to start or maintain an account. If you are just starting out and have little to no money to start your account, you may have to choose an institution that has a low interest rate.

Alternatively, if you have a large amount of cash to put into your new account, you will definitely want to shop around for a bank with with a higher rate. You will also want to see if your bank charges fees for not keeping a minimum balance.

Online Access and Apps

All bank websites and apps are not created equal. If you will be doing the majority of your banking online, you will want to look into if the bank offers a website or app that meets your needs.

The main thing I’d recommend making confirming is if they offer online check deposit. This is especially important if your bank does not offer a local branch. Otherwise, you will be holding onto checks FOR-EV-ER. Seriously, y’all, take it from me: scope out those websites.

Do you have any points you try to remember when opening up a savings account that we didn’t mention? Please comment below!

 

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