To be a successful saver, you need to understand how your savings account works. What are the factors that impact your savings? How can these factors be managed? And what is the best way to manage them?
Table of Contents
Impacting Your Savings Account
Interest Rates
As you know, the interest rate is the amount of money you earn from your savings. The higher the interest rate, the more money you earn on your savings. A high-interest savings account can be the right option for you. But, what is a high interest savings account? It is just like your traditional savings account, except that it offers a higher interest rate and better returns. As per the experts at SoFi, “Even a difference of one or two percent can add up over time, thanks to compounding interest.”
However, many banks offer the same interest rates for all customers regardless of their credit score or income level.
Minimum Account Balance
Having a minimum balance in your savings account is important because it helps you earn interest on your money and avoid paying fees. The higher this amount is, the more interest you will earn. However, you may face fees from some banks or credit unions if you don’t have enough money in your account to meet this requirement (the “minimum balance”).
Additional Fees
When you’re looking for a savings account, make sure it’s not going to charge you for making withdrawals. Some banks charge $2 per withdrawal or even more, which can add up quickly.
If you travel frequently and don’t have another bank in that area, consider a debit card with no international transaction fee that will allow you to use ATMs abroad.
Check the fine print of any online banking service or mobile app that offers additional perks such as free checks; some of them may still charge monthly fees if they’ve been used too many times.
Debts and Rewards on Debit
If you have a debit card, it’s important to understand the fees and minimum balance requirements that come with it.
Debit cards often come with rewards programs, which can be an added bonus for loyal customers. However, these rewards aren’t always as beneficial as they seem at first glance. Some of them only apply if you make a purchase using your debit card; others only apply if the purchase is made within a certain time frame after signing up for the program. If you’re looking for ways to save money on large purchases or want access to cash immediately, these programs may not be worth it for you.
Another thing to watch out for when using debit cards is interest rates—especially if your account balance is low enough that they could kick in during monthly maintenance periods (when there aren’t enough funds in your account). Be sure to check what kind of interest rate your bank charges before signing up as well as any other potential fees associated with holding onto this type of account over time!
Accessibility of Account
It is important to note that your savings account may not be as accessible as you think. How easily can you make deposits and withdrawals, transfer money between accounts, or apply for a loan? If you are able to do these things easily, then the accessibility of your account is better than if these actions were difficult. These elements impact how much money will remain in your account, so it’s worth evaluating how easy it is to access your funds at any given time.
Saving money can seem like a daunting task. With so many options available, it’s hard to know the best choice for your needs. This article has discussed some of the most popular considerations when choosing a savings account and offered insight on how each factor affects your savings potential.
