The saving account is an account in which you can save money for longer durations such as your pension money, education funds for your children and more. It means that it saves the money that is urgently required in emergency situations or required after a long time for certain purposes .
Options in saving account
Such accounts can be opened at many banks and financial institutes to fulfill the holders demands especially when it comes to savings.
Since these accounts are totally based on interest- bearing deposit account they pay a high level of interest rate which is obviously a good option for the holder. The higher the interest rates, the higher the yield upon withdrawal of the cash.
While other accounts have some limitations on the withdrawal of funds. In saving accounts, you have the flexibility to save the money for your urgent need. You can save your money by taking some interest amount in case you withdraw it.
The money can be saved in such accounts for any purpose such as to purchase a car, any medical issues or going on a vacation. It is good to have a saving account because it is the only account which gives you the short-term access to your money usage.
The main plus point of saving account is that you can withdraw, generally, unlimited amount. The other plus point is that your withdrawal amount is considered as taxable income.
Main points to get high yield on saving accounts
The other main feature of saving account is its high yield efficiency. The high yield saving account pays to their holder up to twenty to twenty-five times more than their national average in terms of interests.
Usually, people prefer to get a saving accounts in the bank where they already have their checking account. This double policy gives them a benefit for easy transactions between these two accounts in a quick and easy way.
But as the technology develops, the internet services are making work much easier than earlier. Through connecting with the internet, people have a way to open an account without even going to their designated banks.
They just simply log in to the site and fill up the form which is already uploaded on the related site. These banks open the online doors for their customers. However, as the technology is advancing the competition is also increasing. As a result, the saving rates are also increasing.
These higher rates are usually just available in the banks that work on online basis. In a high yield saving account and the checking account the electronic transfers are quite much easier than others.
If you want to open a high yield saving account, then you have to keep a track of the things which affect the rates of your amount. Such as the deposit requirements, the minimum balance, and the charges of account opening.
If you want to make much significant money then you have to open your saving account in one bank while the checking account in other bank. [i]
Interest rate of saving accounts
The interest rate can be explained in the following way. Imagine someone wants to borrow some money from bank or any other source, than they have to pay some specific amount on the money they borrowed, this forms the basis of interest.
This interest is charged by the person or institution that have borrowed the money to the person. The saving account helps you to save your money on federal basis. Therefore, it eliminates the need to hide the money in your drawers or any other lock, etc.
The saving account has many plus and negative points.
In saving account, you have the easy access to your money as the need arises. You can easily withdraw all of your balance at once. It is also easily linked to your checking account.
You also have the feature of insurance policy of amount $ 250,000 against bank failure.
Before opening an account for savings, you should always compare the features of one bank to others. You have to beware of those saving accounts that give high interest rate only for their promotions
They offer you the high interest rate just for their promotion and for very short durations. If you have the balance of more than $250,000 than it is necessary to split your amount to different banks for security purposes.
You can earn the most interest on such banks where the APY may work. Otherwise other banks might charge the fee on ATM, their customer services etc.
No monthly fee saving account
Having a saving account is such a convenient tool, but they are so costly. Many banks charge the amount for maintenance which is up to $15 a month.
If you have any additional requirement, then your bank may charge some monthly fee while in no monthly fee saving accounts there are no rules or conditions.
While selecting a no monthly fee saving account you should make sure that the bank is offering no monthly fee charges. No startup balance is required. You have to select such banks which are spread across nationwide and have low startup deposit that varies from $0 to $50.
You must select the bank which have its physical presence as well as with its online services. It must have a large network of ATMs and is also insured with the policy of up to $250,000.
Here are some of the banks which have no monthly fee, and they also give you the access to ATMs. Such banks also offer deposits on mobile.
The best overall account is Capital One 360®, the best runner up account is Ally Interest, the account which is best for rewards is Discover Cash back, the best account which is best for out-of –network ATMs is Alliant Credit Union and at last the best account for students which is Chase College Checking.[ii]
[i] www.investopedia.com
