Not all savings accounts are created equal.
So how do you go about selecting the best savings account to meet your needs?
1. Fees and charges
When it comes to making the most of your money, it’s important to check whether the savings account you’re considering has any fees associated with it.
Types of fees you may come across include withdrawal fees and account keeping fees.
If you plan to make regular withdrawals from your savings account, look for one that doesn’t penalise withdrawals so you don’t pay a fee every time you move money around.
If you’re looking to simply deposit funds and leave them there for a while with next to no withdrawals, consider an account that waives the monthly fee when you maintain a minimum balance.
2. Interest rate
Interest rates can vary widely across savings accounts.
A high interest savings account – especially one with bonus interest paid to those that meet the account terms – can make your money work for you. This is a simple way to earn interest, and the only effort you have to put in is adding to your savings. The higher the savings account interest rate is, the more money you could make on your funds.
Higher interest rate accounts may have restrictions on how or when you can access your money. Consider whether you value a higher return on your money, or the convenience of being able to access it easily at any time.
3. Accessibility of funds
Some banks may not have physical branches close to where you live.
High interest savings accounts often don’t offer card or ATM access. This can be a handy way to stop yourself from spending your savings, but it could make it more difficult to access your money when you need it.
If you regularly need to access funds from your savings, consider opening a transaction account with the same financial institution that your savings are with, and setting up internet banking access to ensure you can transfer funds easily.
With BCU Bank’s Pay&Save you can save more by automatically rounding up your card purchases to the nearest one, five, or ten dollars and having it transferred to your savings account.
4. Account restrictions
Some savings accounts offer lucrative interest rates but place restrictions on what you can do with your account as a trade-off. For example, you may be limited to a set number of transactions each month, not be able to make any withdrawals at all, or need to maintain a minimum account balance to qualify for the bonus incentive. Consider whether any restrictions would impact how you plan to use your money.
5. Savings offers and incentives
Many financial institutions offer incentives for moving your money over from another bank, or for opening a new type of account, such as promotional interest rates for a short period of time.
Make sure you understand what you’re signing up for and whether any fees or restrictions apply after the promotional period ends.
6. Term deposits
Term deposits offer a fixed interest rate that is generally higher than your standard savings account. When considering a term deposit, make sure you won’t need short-term access to the funds. Once the money is in, it generally can’t be touched until the term is up without incurring a penalty.
Our Term Deposit calculator can help to help you crunch the numbers and work out how much interest you could earn.