You want to pick the best savings account for your money and your financial needs. Since you do not switch savings accounts often, you will want to select one that grows with you. Whether you are choosing between a high-yield savings account or a money market account, a little research can go a long way.
While bank promotions offer cash and other perks for opening an account, you should make sure you read the fine print before signing up. You could quickly burn through any promotional cash with high monthly fees for the account.
You should review any fees associated with an account before opening it. For instance, banks can charge you a monthly maintenance fee for having an account.
The fee is usually between $5 and $10, depending on the financial institution and the type of savings account you have. This monthly fee adds up to $60 to $120 annual, just for holding your funds. Many banks waive monthly maintenance fees if you:
- Maintain a minimum balance.
- Are a student or a senior citizen.
- Have direct deposit.
- Have less or more than a certain number of transactions.
Some banks only charge a fee if your balance dips below a certain amount. If you plan to have at least that limit in your savings account at all times, you will not have to worry about a fee. A minimum balance can entice you to maintain a financial cushion for yourself.
Likewise, banks might have minimum opening deposits. The amount is typically small, such as $25. The financial institution might charge you a fee for not making a deposit within a certain time from opening the account. Or, they may just close your account.
The point of savings accounts is to save money. Banks may charge a fee if you make more than a specific number of withdrawals within the month. For instance, Ally Bank limits savings accounts to six or fewer monthly withdrawals before you incur a penalty fee.
In addition to not losing money, your savings account should make you money. A high-yield savings account produces a steady stream of free cash.