A savings account can help you to safely and easily set aside money for future purchases and goals. A savings account is a safe way to grow your money. The interest rate is stable making a savings account a good option for those who do not want to risk their money being tied up in investments, stocks or real estate. A savings account can allow you to put money aside and have it steadily grow for your future financial goals.
Shop Around
There are a few things to consider if you are planning to open a savings account. The first thing is to research what banks are offering. You do not have to sign up for a savings account with the first bank you come across; rather you should investigate what the bank is offering in terms of savings accounts. Savings accounts used to offer very similar interest rates, fees and service but now banks are very competitive. Banks now try to differentiate themselves from one another based on their offerings which may include great promotions but make sure to read the fine print. There may be rules that you have to follow including securing a minimum opening deposit and transaction limits. You will have to carefully check the fine print to ensure that you know all of the fees and rules that are required for having your savings account.
Looking around for the best savings account to meet your needs doesn’t have to be painful. You can easily find out what banks are offering for their savings account by searching online. You can easily find out what they require to open a savings account and what they offer you as a customer. Once you have narrowed it down to a few banks put together a simple spreadsheet to track which savings account would make the most sense to meet your personal banking and savings needs.
Online Banks
You may have seen commercials and other advertisements for online banks. These banks forgo the expensive brick and mortar building and service staff by offering their banking services all virtually. These online banks are accredited the same as other banks but are able to offer higher interest rates because they do not have the same costs as other banks do. Service fees are generally quite lower with online savings accounts as well, making them a worthwhile option.
Saving Tips
Some people are born savings, and others struggle with setting aside money. It doesn’t matter what category that you fall into, small steps can go a long way.
- Schedule automatic deposits to your savings account
- By automatically depositing a set amount to your savings account every pay check you will find that you don’t even miss it.
- Set financial goals
- By setting savings goals you will help yourself to stay on track and motivated to save.
- Keep track of your daily spending
- Knowing where your money is going is the best way to become aware of your spending habits. Look at your habits and think of small changes you can make to increase your ability to save. This can include bringing a bagged lunch to work, carpooling or eating at home rather than restaurants.
Opening a savings account and using it wisely can help you to grow your personal savings in a responsible manner. Make sure to check up on your account every so often to ensure that you are saving the best way you can by avoiding unnecessary service and transaction fees.
Special Education Savings Accounts
A 529 plan is a special, tax-advantaged savings account designed to help parents or other family members save money for a child’s college education. Named after Section 529 of the Internal Revenue Code, they were created in 1996 and are run by sponsored by state governments, agencies, or educational institutions. Every state, as well as the District of Colombia, has some form of 529 plan. There are two main types. They include prepaid tuition accounts and college savings accounts.
Prepaid tuition accounts allow the account holder to purchase a unit or credit at a participating college or university. This credit may be used towards tuition or residence fees, if applicable. These plans have stricter age and residency requirements. College savings accounts, on the other hand, allow the account holder to open an account that will be used to pay the college expenses of a beneficiary in the future. These plans have less strict requirements.