Compare, compare and compare again when seeking savings accounts. What is the best way to do that? After all, there are several different types of accounts, features and financial institutions to select from.
There are traditional and high yield savings accounts, certificates of deposit (CDs), retirement accounts, money market accounts, online savings accounts, child savings, student savings, holiday accounts and more.
Prior to beginning to compare all of the aspects of these accounts, make sure you understand your financial objectives. The goal is to get them aligned with whatever savings account you select.
You might want to develop a spreadsheet to collect all of your data. Then let your fingers do the walking—on the internet that is! Just type in “savings accounts” or the name of a bank in your town and click on the savings account hyperlinks on the websites you find.
Some of savings account features that you will want to make note of are:
Interest Rate: Look for the annual percentage rate (APR) yield of the account. Be on the lookout for introductory rates that are high but that then decrease after a certain period of time.
Minimum Amount to Open the Account: Some accounts require only one dollar to open. Some require $25,000. Make sure you are comfortable with the amount needed to open the account.
Fees: Most accounts have fees. You may be assessed a fee if your balance falls below a certain level. You may have to pay a fee if you make too many withdrawals. There may be a monthly fee just to have the account at that bank. This is important to know because with savings account interest rates being so low, fees could easily eat up any interest you may earn on your money.
Other factors: It may be good if you can connect your savings account to a checking account. It may even get you some preferential treatment. Watch out for special offers. A bank may be trying to woo customers by offering a high introductory rate. It may worthwhile to check that offer out.
There are so many factors when deciding on which savings account you will select it could take you a few weeks to sort it all out. But it is worth the time it takes. A few extra dollars in your account because of the research you did can make your money grow faster.