Having a savings account set aside for emergencies is a requirement for any family. That savings account will make all the difference in the world when an unexpected catastrophe strikes. When others would be panicking over having to repair a broken car, you can simply go to the bank, withdraw the funds you need to pay the repair bill, and move on. That’s a great feeling!
Understanding the need for a savings account is one thing; deciding where to keep that savings account is a whole other discussion. There are several different factors that you have to weigh as you decide where to put your money. Depending upon your situation, some factors are more important than others, but you should make sure you understand them all before you chose a bank for your savings account.
Location – If you plan to make frequent deposits in person, you’ll need to find a bank that is in your neck of the woods. On the other hand, if you’re someone who prefers to bank online, you may not care where your bank is physically located. You just need online access. Decide which of these styles of banking is important to you so that you can narrow your search for a home for your savings account.
Accessibility – Imagine for a moment how you will take money out of this account when you need it. Do you want to be able to go a bank and withdraw the money in person? Will you use an ATM card to withdraw cash? Some folks prefer to simply transfer the money electronically into their regular checking account. None of these methods is wrong; you just need to know how you operate so that you make sure you choose a bank that meets these needs.
Interest Rate – You will want to find the highest rate of return you can for your savings account. That concept is pretty easy to understand. However, you have to make sure that you understand what the requirements are to qualify for those high rates of return. For instance, if a bank offers a 3% percentage rate for accounts over $5,000, that bank is perfect for someone with more than $5,000 in their emergency fund. On the other hand, families with less than $5,000 in their emergency fund won’t benefit from that rate. They’ll probably get a lower rate of return. Be sure to look for the best rate of return that is available for your range of savings.
Fees – You should look for an account that doesn’t have any monthly fees. There are just too many banks out there to justify paying for the privilege of having a savings account. Read all of the fine print to understand what the parameters are that go with the account you choose.
Now that you know what you’re looking for in a savings account, you can start your hunt. If you’d like to jumpstart your search online, be sure to visit BankRate.com to use their rate comparison tool. You can use it to compare the offerings at your local banks. Don’t forget, though, to call smaller, local banks and credit unions to get information on their programs, too.
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