Making sure that your money is safe is only one reason to put it into a savings account. Earning as much money as you can in interest is another, and it also gives you the added convenience of being able to access their money online. Choosing which savings account is right for you will take a little work, but it will be worth it in the long run.
Look at the Interest Rate
The one thing that you certainly want to consider first is how much interest your savings account will earn. The interest rates are very low right now and are apt to stay that way for a while to come. Which savings account you choose will very much depend on the interest rate given, but you also want to discover for how long that rate will be given.
High yield savings accounts, which are primarily offered at online banks, may only offer that rate for a limited time, says PersonalFinanceandInvesting.com. Once the offer is over, it is possible that the rate it reverts to could be considerably lower than other banks. By checking for this possible problem, it will help you to get and maintain the best interest rate on your savings account.
Other banks may have an interest rate that is based on how much you have in the account. MoneyManagement.com mentions this, and says that some banks increase interest based on the balance, but some also may not pay anything below a specified balance. You also need to be aware that you will earn the most interest when the bank provides you with daily compounded interest.
Watch Out for Fees
Some banks will give you all of the best features of a savings account for free. Others will charge you for every transaction, including deposits, transfers and withdrawals. Investopedia.com suggests you also look to see if there are fees for opening an account, maintaining it, getting your money from an ATM, or for transferring money between accounts. There may also be a limit as to how many transactions you can make each month.
Consider Ease of Access to Your Cash
Another important factor in selecting which savings account is best for you is to think about how important it is to have easy access to your money. Online banks, for instance, may offer slightly higher interest rates, but it could take up to five business days to get your cash, which often must be transferred to a traditional bank first. Some banks will give you an ATM card to withdraw cash at any time.
Evaluate your Need for Financial Counseling
An article at ABCNews.com mentions that if you think you will ever need to get personal counseling on your financial decisions that you might want to stick with more traditional banks. Standard banks have many different kinds of experts available that can discuss just about any financial matter with you, including loans, investments, savings programs, and more.
Once you determine your basic needs for savings, it will just take some comparison shopping to find out which savings account will work best for you. Create the account, then sit back and let your money work for you.