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[C893]Compare Savings Accounts Interest

by Debbie Dragon, Deb

Savings accounts are where many people hang on to cash for future use – some people save for emergencies, vacations and travel, and the items they would like to buy someday when they have saved up enough money. People feel confident with their money in savings accounts, because they are insured by the Federal government and offer some growth over time.

If you're going to use a savings account to hang on to your money rather than just stuffing it in a shoe box under the bed, you should take a moment to compare different types of savings accounts in order to get the most out of your money.

Interest Rates

When looking at different savings accounts, take note of how much interest they will give you. The higher the interest rate, the better. Keep an eye out for savings accounts that charge different interest rates based on the amount of your balance – and consider how much you will typically maintain in your savings account to determine if you qualify for a higher interest rate or lower interest rate.

Accessibility

How easy do you want to have access to your money? If you're trying to save money without dipping into it, you may choose an account that doesn't have an ATM card, or that requires advance notice for withdrawing money, for example.

On the other hand, if you use your savings account to hold money that you use for your every day spending needs, you'll want to look at accounts that make it possible to withdraw your money instantly, and without penalty or fees.

Fees and Service Charges

Take a look at the fees and service charges that each of the savings accounts you are comparing charge. Some will charge a monthly service charge if your balance is below a minimum level – if you think you may not be able to maintain their minimum balance to avoid the monthly service charge, it's probably a good idea to look at a different account. Monthly service charges almost always cost more than the interest you'll earn.

If you tend to move your money between accounts, you'll want to make sure you won't be charged fees for transferring money. If you rarely move money between accounts that way, a fee for that service shouldn't deter you from an otherwise great savings account.

If you access money via an ATM, you'll want to make sure there are no fees for doing so if possible – or at least select a savings account with the lowest ATM fees.

Introductory Rates

Some savings accounts will give a promotional rate to encourage new customers to open accounts. A promotional rate may offer higher interest earnings for a certain, temporary period of time. If you are going to take advantage of a promotion – just be sure you understand the rates and fees of the account once the promotional period ends to determine if you'll keep your money with that account or if you'll start looking for a new savings account at the end of the promotional offer.

Graduated Interest Rates

If you know your savings will increase over time, you might want to look at savings accounts with graduated interest rates. This means you'll get higher interest with more money in the account, and lower interest with a lower balance.

Multiple Savings Accounts

Many people determine they need more than one savings account. Sometimes having a mix of savings accounts is better than trying to find a “one-size-fits-all” savings account for all of your saving needs. For example, you might have a long term savings for your future needs, an emergency fund for unexpected problems that might come up that require access to money, and another account for specific savings – like Christmas shopping or vacations.

Banks, of course, are always looking to attract new customers, and introductory interest rates are one way they do that. Just as credit cards may offer zero-percent rates to bring in new customers, banks offer higher-than-normal interest rates for a specific amount of time. When comparing savings accounts, this is one thing to take into consideration, but not the only thing.

Assuming you keep the account for a while, the ongoing interest rate will actually be more important in the long run than the initial interest rate. However, if you have a large amount of short-term money to invest, for instance, money you'll be using to close a house within a few months, the higher short-term rate can make a large difference.

Some of the best long term savings accounts do have opening offers but others use the offers to pull you in but have downsides hidden in the small print. In some cases banks require a minimum balance to be mainatined either permanantly or for a certian period after you open the account to avoid being penalised by fees. If you withdraw before the specified time period is up, you'll pay for it. In some cases the penalty amount can more than negate the interest you earned.

Some accounts may be assessed fees, either to open, to close, or on an ongoing basis. While these should always be disclosed they are often hidden away in the small print. Especially if you choose an online high interest account, you'll want to think carefully if there are fees involved. One of the main advantages of online accounts is low or no fees, since the bank doesn't have to maintain brick-and-mortar branches. If you find the account with the highest rates has it's benefits countered by high fees then you might want to keep looking.

Another thing to look for are hidden interest penalties in the month you withdraw your funds. These fees are often not noticed in the small print but can have a significant impact to the real return you make on your investment. Getting less than you thought could put a crimp in your plans.

Sometimes, in order to get an advertised rate, you need to deposit a fairly high minimum. This can be $10,000 or more, in some cases. The minimum deposit amount can be combined with an early withdrawal penalty, turning a high interest savings account effectively into a short-term certificate of deposit. Make sure an account with these restrictions will serve your needs before signing up and sending your money.

High interest saving accounts are a great tool whether you make use of an online account or something offered by your regular bank. Just be sure you read all the information about the account before you sign up, and know about any dates for withdrawal and any fees that might be associated with the account, either on a one-time basis or on an ongoing basis.

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About Author

Both Debbie Dragon & Richard Greenwood are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Debbie Dragon has sinced written about articles on various topics from Finances, Credit Cards and Kitchen Home Improvement. This article has been provided by DepositAccounts.com where you can compare rates on and other deposit accounts.. Debbie Dragon's top article generates over 165000 views. to your Favourites.

Richard Greenwood has sinced written about articles on various topics from Debit Credit Card, Credit Card Offers and American Express Card. Author Richard Greenwood writes personal finance articles on topics including products. He is Direc. Richard Greenwood's top article generates over 135000 views. to your Favourites.