When choosing a savings account, the interest rate is an important consideration. However, it is not the only detail to focus on. There are various conditions, fees, and penalties that you need to worry about.
Finding the right bank for your savings account requires a little bit of research. Some savers may benefit from multiple savings accounts to fit their needs. You should explore your options while paying attention to the following factors.
Review the Real Interest Rate
When searching for a savings account, take the time to compare interest rates from different banks. The interest rates do not significantly vary between banks. However, even a fraction of a percentage offers extra savings when you accumulate interest over a long period.
Keep in mind that the interest rate advertised by the bank may not reflect the real interest rate. It may be a short-term rate for an introductory period. When the period ends, the rate returns to a lower figure.
Some banks also include a variety of conditions that you need to meet to qualify for the advertised rate. For example, you may need to maintain a minimum balance or avoid making too many withdrawals each month.
Before opening your savings account, review the real interest rate. Find out what you earn when you start saving.
Monthly Fees and Added Charges
The monthly fees and extra charges are just as necessary as the interest rates. You should look for a savings account with no monthly fees or hidden charges. These costs can quickly eliminate any interest that you earn.
Some of the most common hidden charges include accounting fees and withdrawal fees. You may also pay a fee when you do not maintain a minimum balance, much like the conditions needed for qualifying for a higher interest rate.
Access to Your Savings Balance
With a savings account, you should not need to withdraw money frequently. The goal of a savings account is to deposit money frequently. However, it is still a good idea to find a bank that provides convenient access to your money.
Some banks charge a fee for every withdrawal while others may charge a fee when you exceed a set number of withdrawals in a month. There may also be fees for using an ATM or transferring money to another account.
Along with withdrawing money, ATMs are useful for depositing money. You may not want to travel far to visit a branch of the bank for every deposit.
If you want easy access to your savings balance, the bank that you choose should have a variety of ATM locations in your area. However, you should inquire about the surcharges for withdrawing money from the ATM.
Minimal Deposits for Opening an Account
Some banks include restrictions on the minimum deposit needed to open a savings account. For example, you may need to deposit $5,000 to open your account. If you do not have the necessary deposit, you may need to look for another bank.
As mentioned, some banks also charge monthly fees when you do not maintain a minimum balance. They may also give you a lower interest rate if you do not keep a minimum amount in your account. When choosing a bank, you should ensure that these details do not get in the way of your savings.
Consider the Reputation and Customer Service
The final details to consider are related to the reputation of the bank. In recent years, the threat of cyber attacks has increased. You want to ensure that the bank that you choose protects your information, as banks often require detailed information when opening an account. Ensure that they have not had any notable security breaches reported in the news recently.
You should also consider their reputation for delivering quality customer service. When customers need assistance, is the bank helpful? These details may help you select the right bank.
Last Thoughts on Choosing the Right Savings Account
Finding the right bank to open your savings account is not a life-altering decision. All banks provide a secure place to store your money. However, if you want to maximize your savings, you should take the time to compare your options.
Look at the interest rates, monthly fees, charges, minimal deposit, and access to your money. Along with these details, do not forget about the government guarantee. Your balance is insured up to $250,000. If you plan on depositing more, you should consider opening savings accounts through multiple lenders.