October 5, 2022
Savvy savers know that if they look after their pennies, the dollars will take care of themselves.
So, if you’re looking for places to gain a few extra pennies, why not start by maximizing your savings account?
Granted, a savings account might not be a flashy investment opportunity with a high return. But most of us use one as a place to park our emergency fund or the dream car fund. So, if you’re going to put your money somewhere other than under your mattress, why not put it in the place that gets the best return? Here are some tips for getting the most out of your savings account.
Try an Online-only Account
Your corner bank branch isn’t the only option for a savings account. Why not try an online account? As of May 2022, some banks are offering online checking accounts with rates of 1.25% (some even higher).¹
With the help of technology, you can link one of these high-interest savings accounts directly to your checking account, making moving money a breeze. Say goodbye to the brick and mortar bank, and hello to some extra cash in your pocket!
Check Out Your Local Credit Union
A credit union offers savers some unique benefits. They differ from a traditional bank as they are usually not for profit. They function more like a cooperative – even paying dividends back to members periodically.
A credit union can also be beneficial as they typically offer a higher interest rate than your everyday bank. Membership in a credit union may also have other perks, such as low-interest rates on personal loans as well as exceptional customer service.
Money Market Accounts
A money market account is like a savings account except it’s tied to bonds and other low-risk investments. A money market can deliver the goods by giving you more for your savings, but there are often account minimums and fees. Before putting your savings into a money market account, check the fees and account minimums to make sure they’ll coincide with your needs.
Don’t Use a Parking Place When You Need a Garage
A savings account is a like a good parking place for cash. Its usefulness is in its ease of access and flexibility.
This makes it a great place to keep savings that you may need to access in the short term – say, within the next 12 months.
For long-term saving (like for retirement), it’s generally not a good idea to rely on a savings account alone. Retirement savings doesn’t belong in a parking place. For that, you need a garage. Talk to your financial professional today about a savings strategy for retirement, and the options that are available for you.
Shopping for a Savings Account
Just because a savings account doesn’t offer high yields, doesn’t mean you shouldn’t consider it carefully. To get the most bang for your savings buck, search out the highest interest possible (which might be online), be aware of fees and penalties, and remember – any saving is better than not saving at all!
¹ “10 Best Online Checking Accounts of 2022,” Chanelle Bessette, Nerdwallet, May 26, 2022, https://www.nerdwallet.com/best/banking/online-checking-accounts