How to Choose a Savings Account

Everyone knows the importance of a savings account. Whether you’re saving for a vacation or an emergency, a savings account makes the process easier. Not only is your money safe, but it’s also growing, thanks to interest. Best of all, the money isn’t burning a whole in your pocket, which means you’re less likely to spend it on frivolous items. How do you choose a savings account? Is an account from your bank just as good as any other savings account? The following steps will help make the process easier.

Instructions

1. Compare interest rates. Interest rates should play an important role in choosing a savings account. After all, the higher the interest rate, the more your money will grow. It’s not uncommon to see interest rates of 5 percent. Take time to compare several different companies so that you choose a savings account that gives your money the best chance to grow.

2. Make sure the account is easy to access. You aren’t going to fool with a savings account if you have to drive across town every time you want to make a deposit. Before you choose a savings account, make sure you can easily add and withdraw money from the account.

3. Look closely at any fees that might be involved. Some banks will charge you fees every time you turn around. This may be fees for making too many withdrawals or a monthly maintenance fee. Read the fine print closely to make sure the fees aren’t outrageous.

4. Choose an account that allows for automatic deposit. Automatic deposit makes saving money simple. All you have to do is set up a time when you want the money to be withdrawn from your checking account. This ensures that you don’t forget to add money to your savings account on a regular basis.

5. Select a company that allows more than one account. If you want to make saving easy, you need to be able to open more than one account. That way, you can allocate money to each account. For example, you could put $200 a month toward an emergency fund, while another $200 went to a vacation fund. This allows you to easily keep up with how much money you have for each expense.

Tips & Warnings

• A savings account that's easy to access will allow you to transfer money to and from a checking account electronically.

• An account that charges a fee after you’ve made so many withdrawals is common. It also helps keep you from spending your savings.

• Always read the fine print. Sometimes an advertised interest rate is only available to those with large accounts.

• It’s important to note that interest rates will fluctuate over time.