How to find the best savings account
Saving money isn’t easy, so when you have managed to put some funds aside or you’re trying to reach a savings goal, you want to make sure that the account where you’re keeping your cash is working as hard as you have. There are a few things to consider when choosing a savings account to make sure you are getting good value. Here are the top questions to ask when comparing.
What’s the interest rate?
The first thing you should look at when considering a savings account is the interest rate. Although these are not as high as they were a few years ago, it can still make a difference to the rate your cash grows into the future.
It’s important to note if an advertised rate is an introductory or a bonus rate. Some banks will offer higher rates for a set time period, and then the account will revert to a lower base rate. Some will have a high bonus rate if you meet certain conditions, like not withdrawing money for a month, but if you do need to make a withdrawal then you only receive the base rate.
What are the fees?
Earning interest won’t mean much if it’s all eaten away by fees! Make sure you read the fine print and consider any fees associated with your account. These may include monthly account fees, branch deposit fees, and transaction fees for online purchases, EFTPOS or over-the-counter transactions. Some accounts may have a minimum balance requirement, meaning you need to keep the level of cash at a certain amount to avoid a fee.
The good news is plenty of banks offer accounts with minimum or no fees attached to them, so shop around and try to avoid the unnecessary expense if you can!
How accessible is my money?
The advantage of a savings account over a term deposit is that your money is right there if you do need it, whether for an emergency situation or just because you want to splurge. However, if there are fees associated with withdrawals as mentioned above, you may want to reconsider if this is the right account for you.
Before you choose to have your savings with any financial institution, check out what they have on offer in terms of online banking and apps. If you like checking your money on the go, these are a must have. The prevalence of ATMs and branches may be something to consider as well.
Are there any extra features or benefits?
Savings accounts are a competitive space in the banking world, and different institutions try to entice customers with extra features and benefits to make saving easier. For example, some banking accounts will encourage you to set savings goals within the mobile app, prompting you to make small deposits at regular intervals to reach milestones.
Others will let you ‘bucket’ your savings into categories to save for different goals, such as travel fund, house deposit, and wedding day. Some banks offer personal financing tools like budget calculators and tracking apps to help you manage your savings.
All these features can be useful but shouldn’t be the key part of your decision making. The most important thing is the potential for your money to grow!