A savings account is more than just a place to stash your cash. It’s a fundamental building block in upping your credit score and a personal safety net in the event of an emergency. Savings accounts make planning ahead for major purchases such as a car, a home, or a college education a steady process and not a mad scramble. Even if you’re not inclined to invest your money in the stock market, a savings account is an investment in your future.
If you don’t already have a savings account but are thinking about it, there are a few things to keep in mind to be certain you find one that fits your savings needs. If you already have a savings account (bully for you, my friend!), there are still a few ways to make sure you’re getting the most bang for your bucks in the bank.
1. Look For Savings Accounts With No Fees or Low Fees
Always read the fine print. Some savings accounts will require a certain amount to keep your account open each month. Others may charge a monthly fee to maintain your account, or assess a charge if your balance dips below a certain level. Shop around for savings accounts that are free or require nominal monthly fees to maintain.
Another thing to consider are overdraft fees. Although these fees do not traditionally apply to savings accounts, if you are able to link your checking and savings accounts, you may find a deduction from your savings for a transgression stemming from your checking account. In some instances, even if you overdraft your account by a only few pennies, your savings account can be hit with a $20 (or more) fee per transaction in addition to the amount your account was overdrafted. Look for savings accounts that can be linked to your checking account that only use your savings as a “back up,” debiting only the amount overdrafted without assessing you a hefty overdraft fee.
2. Consider a High Interest Savings Account
Depending on how much money you are able to keep in your savings account, a high interest savings account (or high yield savings account) may be worth looking into. High interest savings accounts offer a higher APY. The greater the balance of your account, the higher the interest rate your bank may give you. Typically, a large initial deposit is required to open a high interest savings account. However, if you are able to make that type of investment, the high yield makes it a much more attractive option and earns a bigger return on your savings in the long run. One caveat is that you may not be able to use checks with a high interest savings account.
3. The Convenience Factor
One of the most important things to consider when setting up a savings account is how convenient it will be for you. In this digital age, it’s simple to do banking online or download an app for your phone to move your money to where it needs to go. Look for a bank that offers online banking or a convenient phone app so you can monitor your savings account daily.
Although online and phone banking are great modern conveniences, sometimes, it pays to open your savings account at a local, brick-and-mortar branch. In the event you ever lose your ATM card and need to make a withdrawal or speak with someone face to face, having a local branch you can visit with your questions is always a help.
This article was provided by Lana Cooper on behalf of Conestoga Bank. Conestoga Bank is a full-service commercial bank serving the needs of individuals, small businesses and organizations in Southeast Pennsylvania and Philadelphia.
About Guest Blogger
Actually the biggest thing about setting up a savings account is to create an ACH or Bank-O-Matic link from your paycheck. You can get the account set up, but if there aren’t regular savings going into it the bank account won’t do you much good at all.