If you are planning to invest your money in a bank through a savings account, what are your considerations before entrusting your hard-earned money in a financial institution? Are you looking for a bank that has a various number of branches that are more accessible whenever you have to make any banking transaction? Could it be the bank’s queue that matters because you have very limited time due to your long list of to-do in a week and cannot afford to spend too much time waiting for your turn at the bank’s teller or is it the interest rates which plays a key role on your decision making? Or the interest rate they give?
The majority of the bank clients, before they opened their first or maybe second savings account to help their finances grow, the initial consideration that they are looking at are the percentage figures reflected on the savings account from the bank’s product listing. High-yielding savings accounts are great if you want to multiply your money without thinking much about it. After all, almost every bank offers savings accounts and they all promise the same thing: high yields, better interest rate, and more money.
If you want to figure out if you are right with your bank of choice, you have to shop and compare to see the best in savings accounts so you can pick the one that gives you more money with every deposit you make. Start looking for features of the best savings accounts that are available today. Maximize the savings account that will assist you in reaching your financial goals faster.
Before we head on to the interest rate of the leading banks offered to their clients, let us talk about a savings account. Savings Account is a deposit account held in a bank that pays interest but cannot be used directly as money in the narrow sense as a medium of exchange. These accounts let customers set aside a portion of their liquid assets while earning a monetary return.
From a marketing’s point of view, banks offer specific rates on a certain country that is possibly different from others where they are also operating, because marketing strategies vary from one country to another. Let’s take for example the local banking scene in the United States for this article with a Top 10 list of the respective banks that offers the highest interest rates in their local banking arena since USD is widely used for trade and commerce.
To further understand the facts and figures that I am going to share later, let me share with you another info, it is about APY. APY (Annual Percentage Yield) indicates the total amount of interest you earn on a deposit account over a year, assuming you do not add or withdraw funds for the entire year. The APY includes your interest rate and the frequency of the compounding interest, which is the interest you earn on your principal plus the interest on your earnings.
Marcus by Goldman Sachs
APY 1.70%
Minimum Balance $0
American Express Co.
APY 1.70%
Minimum Balance $0
Capital One Financial Corp.
APY 1.50%
Minimum Balance $0
Ally Bank
APY 1.50%
Minimum Balance $0
Discover
APY 1.50%
Minimum Balance $0
Synchrony Financial
APY 1.50%
Minimum Balance $0
CIT Group Inc.
APY 1.15%
Minimum Balance $100
State Employee’s Credit Union
APY 0.75%
Minimum Balance $25
Navy Federal Credit Union
APY 0.75%
Minimum Balance $5
Columbus B&T
APY 0.22%
Minimum Balance $100
Banks use your money to finance loans to consumers. For this reason, competition between banks to land new savings accounts has become fierce. But this still doesn’t mean you will earn a great return on your money through a savings account. A savings account acts as a place where you can store money safely and retrieve it easily, a concept known in financial circles as high liquidity. These characteristics make a savings account ideal for short-term financial needs and goals such as emergency fund, house down payment, large purchases such as car or vacation and/or seed money for college.
There are three common ways savers may open their savings account. It could be in person, online or by phone. Even though you bring your money with you to the bank, you can still be turned down for a savings account activation. Unpaid fees, bad credit, overdrafts on other accounts, a fraud conviction and bounced checks are some of the common reasons why an application for opening a savings account gets rejected by the bank. Prospective account holders may also get turned down for insufficient identification which rarely happens and can be easily avoided by bringing along an official photo id or much better, an id issued by any government entity.
Are there advantages in opening multiple savings accounts?
The idea of having multiple savings accounts may sound redundant, it makes a lot of sense when you consider how individual accounts can help keep financial goals from overshadowing each other. You may want to open separate accounts for an emergency fund, one for vacation, another one for your child, and the other one is to save for holiday purchases. Always be reminded that the money in these accounts may not keep up with the inflation, so it’s best to use them for short term goals or for instances where you want to have immediate access to your funds. There are still the pros in settling for a savings account, the money isn’t quite as easy to access compared to the cash that was stored in your wallet. There may be some positive guilt involve in touching an account for potentially frivolous reasons, when, after all, you’ve dedicated it for a special purpose beyond your immediate gratification. To avoid temptation, I suggest forbidding carrying any debit cards for these accounts, which might tempt you to use this on your unnecessary purchases.
While creating multiple savings accounts can provide organization and motivation to fund your pet projects, be careful about spreading yourself too thin. One separate account may be enough to use for one goal and then reuse for another once its mission is accomplished. It is important to have a goal in mind and ask yourself how many accounts it makes sense for you to manage without overwhelming yourself or your repositories underfunded.
Since you already have an idea about a savings account, you might want to read about unique business ideas to better grow your finances. Click here to know more.
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