Savings Accounts: How to pick the best
When it comes to savings and investments the name of the game is getting a good return on your money. There are countless savings and investment options out there, but if you are looking for a secure place to put your money with a reasonable rate of return, a high yield savings account is probably the choice for you.
The main advantage of high interest savings account products, as opposed to standard checking accounts, is that they offer a considerably higher Annual Percentage Yield (APY), so your investment will grow much faster.
High yield savings accounts are ideal for people who have set themselves long-term savings goals, such as saving for the deposit on a new home, a car or even retirement. In addition, the longer you can leave your money in the account and the more you can invest, the more you will see it grow.
However, high interest savings accounts do not come without a price, and that price is flexibility. Often the highest rates on offer may come with restrictions or conditions.
Here are some of the most common restrictions you will find on high yield savings accounts:
* You may be required to make an minimum initial investment and/or lodge a certain amount to the account every month;
* You may have to keep the balance over a certain figure over a certain length of time;
* Limited withdrawals or withdrawal penalties on account.
Not all high interest accounts impose all these conditions; some have almost no restrictions while others have only a few. Also be aware that if you break the terms and conditions you may not be paid interest on your investment or you may have to pay fees or charges.
So it is essential that you have a clear idea of what you need before settling on a high yield savings account. If you need a lot of flexibility with your account that is fine. You may have to settle for a lower interest rate, but it should still be better than a standard checking account.
Ideally, you will be in a position to deposit an initial lump sum, deposit more each month and leave your investment untouched for at least a couple of years. This way you can avail of the best offers and really watch your money grow.
When reviewing the offers on the marketplace it can be seen the best offers are typically found online. Many of the big high street banks offer the best rates with their online high interest accounts while maintaining a good deal of flexibility.
This is a competitive market in recent times so you should be able to find a good product for you. Look for a good high yield savings account that suits you that charges no transaction fees or set-up charges. You shouldn’t need to have your everyday banking account with the bank you choose to save with. You should be able to transfer from any account into your savings account, online and free of charge. Finally, ensure that your deposits are FDIC insured.
Don’t get caught out by intro rates that only last a few months and then drop off to a rate well below the market leading rates. Some accounts have tiered interest rates so you earn more as your balance increases.
This knowledge will put you in good shape for researching the offers available to you. Take some time to explore the options to find the right high yield savings account for you.
Tips from Richard at the Click4Group network.com.au which compares products including St.George savings to help consumers make an informed decision.
