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Choosing the best savings account

February 11, 2020

Choosing the best savings account

It's a great idea to put aside some of your money into a savings account. It can be useful for anything from an emergency fund to travel expenses. However, some savings accounts don't earn much interest - and you could be missing out on making money at no cost or effort to you. For advice on choosing the best savings account, read below.

  • Find out what the highest rates are. If you look up the national average, as well as which accounts earn the most, you'll be able to set realistic expectations for what you could be earning and what's competitive. (At this time, the best ones are close to 2%, or higher.)
  • Look into savings account options at a variety of institutions, including credit unions and online banks. Do the math to see what you could be earning if you set up an account at any of these banks. As you do this research, be sure to check on how the banks you're considering have performed historically.
  • Think about how much money you could realistically deposit into a new account. Some banks with higher annual percentage yields (APYs) require a larger deposit or only allow you to earn more if you have a substantial amount in the account.
  • Think about how much money you could realistically deposit into a new account. Some banks with higher annual percentage yields (APYs) require a larger deposit or only allow you to earn more if you have a substantial amount in the account.
  • See how frequently interest compounds. This could be daily, monthly, quarterly or annually. The more often it compounds, the faster your deposit will increase.

Give more meaning to your spending

  • Write down what you buy. After a day, and again in several days, answer this question: Did the purchase help you accomplish a certain goal?
  • Is this item for daily use? If so, it's probably worth buying.

Savings accounts are a smart way to organize extra money. Look into your options to decide where it's best for you to open one.

For more on this subject, read:
- https://www.bankrate.com/banking/savings/rates/
- https://www.bankrate.com/banking/savings/5-ways-to-get-the-best-savings-account-rate/?itm_source=parsely-api?relsrc=parsely
- https://www.nerdwallet.com/best/banking/savings-accounts?trk_location=ssrp&trk_page=1&trk_position=2&trk_query=savings+account