A savings account is actually something called a ‘time deposit.’
That means that you don’t really have the kind of access to it that you might think, or at least your bank doesn’t have to give it to you. They can actually require you to keep the money in the account for a set amount of time or to give them some form of notice before you take it out.
Now, it’s not something that generally happens with your account, but some institutions do impose limits on the number of times you can make transactions and withdrawals.
That’s because there are actually federal limits on just how many times you can make a withdrawal on a savings account. And there are limits to the ways that you can do it as well.
For example, deposits are unlimited and there’s no penalty for you putting money into your account. On the other hand, if you take money out you may be limited to just six transactions.
Shop Around For The Right Saving Account
Okay, so the first thing to look at when you’re trying to find a savings account for yourself is the money it’s going to cost you.
So, how much do you need to have in order to open the account? How much do you need to avoid added fees for a low balance? How much interest are you going to earn? All of these things are going to be important for you.
You also want to look at some of the extra features that you may be able to get like mobile deposits and even account alerts if you have a low balance. Look at everything that’s provided about your account including how you can initiate transfers and how long they take.
1. Understand Your Needs
You want to compare the interest rates that you can get with your account, but you also want to look at some other factors. You want to know about the institution that you’re going to be dealing with too. And how that relates to your wants and interests.
– How Much Can You Deposit?
There may be a minimum amount required for you to open an account at a specific institution. You want to know what that minimum amount is so you’re prepared.
It might be nothing. It might be $10 or for high interest savings accounts it could be $10,000 or more. If you don’t hit the minimum you’ll be charged fees.
– Do You Intend To Make Withdrawals?
Do you want to make withdrawals from your account?
If you do then how many are you planning to make in a month? What is the bank you’re looking at going to do about that?
Will you have limits on how many withdrawals you can make? Are you going to have fines or fees if you go over the amount that you’re allowed? Are there ways of withdrawing money that don’t cost you money?
– Are You Comfortable With Online Banking?
If you’re interested in online banking you may actually be able to save yourself some money. There are some accounts and banks that are entirely online while others might offer online services.
Also, you can generally get higher interest through these accounts and have fewer fees and regulations. Not to mention you can access everything 24/7 online.
– Are You Managing Multiple Accounts?
Maybe you have an account at a different financial institution as well as this one.
If you do then you may want to take a look at the benefits of bringing all of your accounts to one institution or the other rather than keeping them separate.
– Are You Making Regular Deposits?
If you are going to make regular deposits you may want to take a closer look at some institutions that offer you benefits and bonuses for this.
You may need to have a set amount coming in each month but if you’re hitting that mark you may as well get something for it, right?
– Are You Saving for Long Term or Short?
You’ll want to look at some of the benefits that you can get for the type of saving you’re doing.
If you have a short-term goal you may be willing to sacrifice the interest rate you can get later for one that you can get right now.
2. Compare & Shop Around
Here are the top things to pay attention when shopping around for savings account:
This is one of the most important things and one of the ones that you probably actually think about, right? After all, you know that you want the best interest rate that you can get. That’s going to ensure you’re making as much as possible and your money is actually working for you.
Remember you’re looking at compounding interest in this process too.
You’re earning interest on your money but also on the interest that you’ve already earned on your money and that’s definitely going to be a big benefit for you.
Make sure you’re keeping an eye on just how that works and that you’re looking for the best rates.
When we talk about rates we’re talking about APY for the most part and this can be different from one institution to the next.
Make sure that you’re paying attention to that and that you’re comparing different places that you could be getting your accounts.
You want to get the best features as well as the best interest rates.
Having to pay fees is definitely going to cut into the amount of money that you’re going to save and earn when it comes to your accounts.
So, how do you make sure that you’re not paying all those fees? You’re going to have to look at different institutions and you’ll need to pay close attention to just what the fees are that they charge.
There might be one for just opening your account or for having too low of a balance or making too many (or even any) withdrawals.
This is becoming a whole lot more popular lately and for good reason. There’s a whole lot that you can do with online banking that means you’re not forced to run to the bank all the time. You can just use your mobile device to get into your account and see what’s going on or what you want to do.
It’s important that you keep track of where you’re accessing your account and that you don’t log in using public accounts like those at your local library or coffee shop.
These can easily be hacked and your information could be compromised. When you’re using a private network, however, you could take care of your banking from anywhere.
Another great benefit is even being able to deposit your checks from anywhere you want. That gives you instant access without having to go to the bank to make that deposit in the first place.
Look for institutions that are going to offer you a signing bonus.
These can vary in size and not all institutions offer them at all, but if you can get one it’s going to be completely free money and a big benefit for you.
Minimum Balance Requirement
When you first open that account you want to know just how much it’s going to cost you to keep the account open.
Then you want to know how much needs to stay there in order to make sure you’re not charged fees. You want this number to be low or even nothing at all because that’s going to help you if you ever find yourself with an emergency where you need that money.
You’re putting your money into an account with a financial institution because you want it to be safe. But you need to share a lot of information with that institution for them to do this.
So, make sure you’re looking at what they do to keep your personal information safe as well as your money. And don’t trust just anyone.
If you can put your money into your savings account automatically you’re going to be far more likely to actually do it.
So, see if you can set up transfers to occur automatically every time you get paid or every month. You can set specific amounts for how much to put in the account but you want to make sure that you’re not being charged any fees or fines to do this.
How good is that branch about handling any of your concerns or problems? Do they seem like they really want to help you?
Are they going to get the problem resolved quickly? Are they easy to reach when you find out that you have a problem? These are all important ways to make sure you’re getting the attention that you deserve.
3. Open Your Saving Account
Okay, so you’re ready to open up your account so what do you do? It shouldn’t be too difficult In fact, you should be able to just make a phone call or walk into the branch or even get online and start the account. Plus you should be able to do it in a few minutes.
With any type of account you want to be able to get good access and you want to know that you can link different accounts as well, so you can transfer money back and forth whenever you want to. Just make sure that you have all of the documents you’ll need to get that account going.
You may need to bring in a bill that has your mailing address and name, some form of photo ID like a passport, military ID or driver’s license or even a secondary form of ID like a social security card, birth certificate or bank statement from another financial institution.
If you’re looking at opening an account with a credit union instead of a regular bank you may need to provide additional documentation that says you’re eligible for that account.
These institutions sometimes have more strict requirements for where their members work or causes they support, for example.
Just make sure that you’re reading through everything before you sign. You don’t want to find yourself with any kind of fees, fines or other drawbacks that you weren’t thinking about. You want to know exactly what you’re getting and what you’re going to be paying in order to get it as well.