Saving is an important aspect of financial planning, but often overlooked. Maybe you are so overwhelmed with paying bills and making ends meet that you forget to plan for the future. But regardless of your expenses and present financial outlook, saving should be a priority. Saving your money not only provides a cushion if you lose your job or have a medical emergency, it can also provide a measure of financial security in retirement.
A savings bank is a financial institution that accepts savings deposits and pays account holders interest. A bank is a safe place to hold your money, and several options are available to you. Online savings accounts typically offer higher interest rates, which can quickly grow your money. But with online accounts, your money is not easily accessible and you miss out on personal attention. The best deals aren’t always online. Visit a neighborhood savings bank and then decide the best place for your money.
If you’re looking to open a savings account, here are four tips for choosing the right financial institution.
- Look for competitive interest rates. The best interest rate on your savings account can achieve your financial goals sooner. Do not choose a bank simply because its close to work or your home. Go online or speak with a banker and discuss your options. What type of savings accounts are offered by the bank? What is the interest rate on these different accounts? A traditional savings account is not your only option, and since these accounts have rates around 0.01%, it takes longer to increase your savings. Other savings options, such as a high-yield savings account, certificates of deposits and a money market account, have better rates than a savings accounts.
- Compare bank features. You need a bank capable of meeting your various needs. How do you prefer to bank? Maybe you are old-fashioned and visit the bank each time you need to make a deposit or withdrawal. Then again, maybe you prefer online banking or mobile banking. Some neighborhood banks are small and do not offer innovative features. Understand your options and then choose a bank that matches your needs.
- Ask about protection. What measures will the bank take to protect your savings account? A good savings bank will be FDIC-insured up to $250,000. Make sure the chosen bank participates in the FDIC program. Banks normally display an official sign near the teller window or counter. Additionally, you can visit the bank’s official website or contact customer service to inquire about protection.
- Research the bank’s reputation. What are others saying about a particular financial institution? Are they happy with the service? Do they recommend the bank? A good interest rate on your account and modern account features are desirable. However, if the bank has a horrible reputation in the neighborhood, seriously consider whether you should trust your savings to the institution. Go online and check real customer reviews, and contact your local Better Business Bureaus. This way, you can familiarize yourself with common bank practices and assess the bank’s level of customer service.