If you’re looking for a high-interest savings account, choosing the first one that promises a high rate can be tempting. But when it comes to your money, it’s important not to rush into things. Instead, take the time to shop around and compare features because many factors will impact your ability to earn interest on your savings balance–and some could even cost you money!
Look for a high-interest rate
First, know what is a savings account. SoFi experts say, “A savings account manages your banking needs easily.” In the US, there are two ways to get a high-interest rate:
- Look for an account that pays interest on your balance. This is the traditional way of getting a good return. Also known as “interest on deposits,” this is where you earn money based on the amount of money you deposit into an account.
- Look for an account with a high-interest rate. This is another way that some banks and credit unions pay more than others to attract customers, but it’s also important to note that some accounts will charge fees in order to avoid losing money if there isn’t enough cash flow coming in from other sources.
Calculate how much you can save each year
How much you can save each year depends on your income. If you earn $50,000 per year, for example, then you should be able to save $2,000 per year (or $167 per month).
Suppose you have a high-interest savings account and can put away more than what’s suggested by their rule of thumb above. In that case, the more money that is available in your account when it comes time for interest payments will mean more interest paid out on any unused balance at the end of the term toonily.
Don’t be lured by introductory offers
Some high-interest savings accounts offer introductory rates for the first few months. This can be a great way to encourage new customers, but don’t be tempted by these offers. Instead, be aware of the rate after the introductory period and how long it will last before any bonus periods end.
Consider the account’s features
When you’re considering a high-interest savings account, it’s also important to think about the features of the account itself.
- How many withdrawals are allowed per month? Each bank has its own rules here, so check before deciding on an account.
- Can you do transfers between accounts? Transferring money from one account to another is helpful if you want to consolidate your funds or keep everything in one place.
- If the account is linked with an ATM card, how much does it cost per month? Fees for using your own bank’s ATMs can add up quickly if you use them every week, so ensure there aren’t any hidden charges before signing up for this card.
Don’t sacrifice convenience
You don’t want to sacrifice convenience to get higher interest. After all, the ease of use makes banking on your phone or computer so appealing in the first place! You want easy access to your funds and to be able to make deposits and withdrawals seamlessly.
Look for online access, mobile apps, and free transfers from external accounts or financial institutions. You also want fees like monthly maintenance fees and ATM withdrawal charges minimal.
If you’re willing to put in a little extra time and effort, then you should be able to find a high-interest savings account that fits your needs. There are plenty of options for people who want to save money and earn more on their deposits.