Surprising Facts About Modern Savings Accounts


Savings accounts may seem pretty simple, but there are actually many things about them that consumers don’t know — and that could be unwittingly costing them money. Here are some facts you may be interested in knowing about modern savings accounts.

1. Promotions Can Be a Great Resource

If you don’t yet have a savings account, look for a savings account promotion. Many times, financial institutions will offer up anything from bonus cash to sports tickets and more as an incentive to open a new account with them.

2. Automatic Savings Options Can Save You Money

Savings accounts may seem pretty simple, but there are actually many things about them that consumers don’t know — and that could be unwittingly costing them money.Another type of promotion many financial institutions offer is the option to set up automatic transfers of money from their checking to savings accounts. Not only does this seamless process give the consumer complete control over the amount and frequency, but some institution also tack on additional incentives, such as waived fees.

There are even programs that automatically round your purchases to the nearest dollar and place the excess change into a savings account, saving you money little by little when you aren’t even realizing it!

3. A “Money Market Account” is a Savings Account

A money market account has the returns of a high-interest savings account with the easy liquidity of a checking account.

“Offering flexibility similar to a traditional or high-interest savings account, money market accounts allow savers to make withdrawals anywhere from three to six times per month. But instead of having to withdraw from a teller or ATM, depositors are offered checkbooks,” Bumpus said.

Again, the minimum deposit to open a money market account is typically higher, but as with a savings account, you will have peace of mind knowing that your account is flexible.

Also, like savings accounts, money market accounts are federally insured, meaning up to $250,000 will be federally protected at most financial institutions.

4. You Can Use Your Savings as an Overdraft Account

A Moebs Services study found that overdraft revenue for the second quarter of 2015 grew $1.7 billion over the first quarter of 2015 — and if it grew that much, imagine how much consumers worldwide are paying in overdraft fees.

Rather than having your financial institution cover your checking account overdraft for a fee, set up your savings account so that funds to cover the amount are automatically pulled from there. There may still be a small fee for this service, but it is smaller than a paid-item fee would be if you overdraft.

5. High-Interest Rate Savings Accounts Exist

If you can’t go with an online account option for higher return rates, consider a high-interest-rate savings account. It may take a larger financial commitment, but the results are worth it.

“Some traditional banks reward customers’ large savings deposits with a considerably higher interest rate than they offer to customers with smaller balances. However, to get these higher rates, banks sometimes have a series of requirements customers must meet,” explained Natalie Campisi of GOBankingRates.

Savings accounts are obviously not as cut-and-dry as one may assume, so make sure to research your account and its options with your financial institution today.

 

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