Why You Should Be Shopping for Savings Account Interest Rates
Ownership of finances is power. The everyday working woman typically isn’t thought of as financially powerful. This is an easy fix. There are so many small changes that can be made to put you in position to be in control of your money and how you use it and grow it.
Shopping for savings account interest rates is something so simple, it can be done from home or even from your phone. Landing a savings account with an interest rate better than the one you currently have, is an instant boost for you and your money.
Shopping for Savings Account Interest Rates – Free Money
Interest is often thought of as a bad thing. The constant fight to get the lowest interest rate when making big ticket item purchases is the norm and it perpetuates this angst around the term “interest” when it comes to finances.
The flip side of that coin is that we want to get the biggest return we can when interest works in our favor. Financial institutions began offering incentives for new account holders. One of the more popular incentives that still exists today is the APY on savings accounts. Banks want money in the accounts so that they can use that money to loan out and earn, you guessed it, interest. So, having more active accounts works in their favor. Because there are so many financial institutions, competition for customers drove down savings account interest rates over time.
At any rate, interest still exists and it’s free money that you don’t want to leave on the table.
Shopping for Savings Account Interest Rates – Rates Differ
Like any good competition, you have a spectrum of players. Some banks will low ball customers who are not aware of the going rate. While others lure you in with too-good-to-be-true offers of staggeringly high interest rates with hidden ‘catches’ you don’t see until it’s too late.
The best way to embark on shopping for savings account interest rates is to know what the baseline is. The baseline is loosely determined by the going federal rate. If your bank offers an APY that is no more or less than .5% off from the federal rate, you are well within the current norm. There are ways to get better savings account interest rates, though, so don’t automatically settle for average.
Shopping for Savings Account Interest Rates – Fit Matters
Your financial plan should be multifaceted. If savings account interest rates is not how you choose to increase your financial situation, then finding an average yielding account may be an easy choice for you. However, if you are looking to maximize this form of growing your money, you want to put in some work.
The difference between a 1% APY and a 3% APY can be worth the work in the end.
Tips on Shopping for Savings Account Interest Rates:
- Non-traditional financial institutions
Explore non-traditional financial institutions. Banks are not the only ones in the money game nowadays. Online institutions are a great alternative. They are able to offer higher interest rates due to the fact that overhead and maintenance of a brick mortar building are not expenses the incur.
Credit Unions are another good alternative. You might also want to look into the savings accounts offered by your credit card company. Many times both of these non-traditional options will offer you more bang for your buck
- Look outside your current bank
It’s easy and convenient to simply open a savings account at the same bank you have your checking account through. This is lazy banking and can cause you to miss out on free money. Take the extra time to Google other institutions and research their interest rates. You may find that your current bank offers the best savings account for your situation. But if it doesn’t you can easily open a new account and start earning better interest right away.
- Research before you leap
As with anything, do your research. Your financial power ultimately lies in your hands. Take responsibility for it. Don’t leave decisions concerning your money up to anyone but yourself. Remember that entities exist to make money. That’s their job. Your job, on the other hand, is to not be taken advantage of.
Check for hidden fees, ask about minimum balance requirements and restricted transfer options. Some banks may also base their savings account interest rates on how your funds enter the account. There are some online banks who only honor higher APY’s if the money is direct deposited. Others restrict you from transferring funds from another institution into the savings account you hold at their institution.
Make sure you are ok with whatever the requirements are BEFORE you put your money into an account.
I will leave some links below to lists of institutions with the best savings account interest rates.
Do you know of any other simply tweaks to help grow money and improve finances? Leave them below in a comment.