Save Your Money And Watch It Grow!
If you do nothing else this week, why don’t you see if you can make your money grow by opening a savings account?
You may have looked at doing this in the past but been so overwhelmed by the choice on offer that you decided not to bother in the end. But if this is the case, you could have been missing out on a substantial amount of free money.
A savings account is something which keeps your money safe while paying you for the privilege of doing so. Think about it this way; you’re lending your money to a bank, so they have to pay you for doing so. It’s like a reverse loan!
Admittedly we can’t make as much from savings account interest as a bank can make from a loan, but any free money is good in this day and age. As there are so many different types of savings account out there, I’ve compiled a helpful table with the most common, and the features common to each one.
The table should give you an idea of what kind of account could suit you, but you should always check the actual features with the bank you’ll be opening the account with, as they may vary. Some banks may choose to allow checks on a CD account for example, or fix an interest rate for a certain period on an MMA.
Explanation of Terms
Checks Allowed – You can write checks against this account, although you may be limited to how many
Easy Access – You can withdraw money without incurring fees, and are not restricted to how many withdrawals you make
High Interest Yield – Pays a high rate of interest compared to other savings accounts
Withdraw Any Time – You don’t have to give notice before withdrawing money
Fixed Interest Rate – Your bank agrees to pay you the same rate of interest throughout the term
Long Term Saving – These accounts can or do lock your money away for a fixed term, preventing withdrawals
Restricted Activity – You may be limited to a small number of transactions per year, or have to give notice before a withdrawal
Minimum Deposit to Open – These accounts require you to make a minimum deposit in order to open. This can be anything from $1 to $10,000, depending on the bank.
Further Deposits Accepted – Some accounts will allow you to make additional deposits during the term. This is sometimes capped to a maximum amount each year
Minimum Ongoing Balance – An MMA requires you to keep a certain amount in the account at all times, even if you make withdrawals. Dropping below this amount may incur charges.
Interest rates can be a confusing part of choosing a savings account. Fortunately, once you know how, they’re easily compared. Use an online savings interest calculator, a handy tool which will tell you how much interest you could earn per year, given the amount in your account and the interest rate.
