The Basics About Savings Accounts

Savings accounts are easy for the most part. They include many of the same features that checking accounts offer. All you need to do is find a bank that suits your savings habits. Most banks will have a minimum that they will need you to keep, and some of them have fees that penalize you if your balance falls below the minimum.

When you look for the right account for you, remember these key questions:

• Is the account federally insured?

• What is the minimum balance I need to keep?

• What is the interest on my savings?

• Does the bank use a tiered account system?

A tiered account system means if the balance in your account is always over a certain amount, you'll earn higher interest. The minimum is usually $1,000 but most of the time much higher. If you have a lot of money that isn't being invested, these are your best bets, but it's probably better if you invest your money. If you want to learn more about Basic Investing, click here.

Every savings account earns interest. Banks used to offer higher interest rates until "federal deregulation" came in the mid '80s. Now the interest rates are pathetic. That's why it's important to shop around for your account; you're always going to find competitive rates.




So how exactly do you shop around for the best accounts?

It's Easy! Here's the deal:

• Consider going with Internet Banks. Because of their low overhead, they can offer great deals and interest rates on your account.

• Go to www.bankrate.com and check out the banks that are offering the best interest.

• Check out the best rates on CDs that each bank is offering.

• Don't limit yourself to local banks only. You can contact top-paying FDIC-insured banks in other states that will give you twice what your hometown bank is giving you.

• Lastly, remember that CDs will offer you more on your money. Click here to learn more about how CDs work.


As you can see, savings accounts are pretty easy. You're going to want to make your money work for you as hard as you can. These accounts are just one tool you can use to secure your financial future.


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