Savings accounts are a great way to keep your savings safe and dependable. While day to day business is almost always going to be conducted through chequing accounts, a savings account is an easy way to help you to prepare for major purchases or slowly accumulate funds for future use or investments.
Like almost any banking service, there are plenty of savings options that are available to banking customers. Picking the right one can be complicated. Banks will often try to complicate things to make sure that you’re picking the account that benefits them the most, rather than the one that benefits you the most. Saver beware!
Free Savings Accounts
Free savings accounts are great for when you want to build a nest egg. Free savings accounts are often online accounts that require you to transfer the funds to a different account to access them. These free accounts will often offer up surprisingly great interest rates in an effort to get a large following. It’s common for smaller or newer banks and credit unions to offer a free savings account as an additional carrot to encourage new business.
Interest Rates
When you are using a savings account, the main goal is to receive a solid return on your money through interest. Most banks have a lot of different savings accounts, so you need to take a look at the different ones they are offering and figure out which one is best for you.
Interest can be measured daily, monthly or yearly. It will compound up to the total annual interest rate. That generally means that you would prefer to have it compounded daily for additional money by the end.
Your interest rate is also going to vary on one big factor. How much money do you have in your savings account? For a lot of accounts, the more money you have sitting in the account, the better interest you will receive. A pretty standard starter level is $5,000. Below that you may get negligible interest rates down to something silly like 0.05%. Then as soon as you get above that $5,000 threshold, you will suddenly be able to
Joint Accounts
Joint savings accounts are perfect for families. Rather than using the savings account for long term savings, you choose to instead go for medium term savings for major items like renovations to a house or big vacations.
With the joint savings accounts, it’s easy for partners to deposit and accumulate savings together. True, deposits can be made manually. But the best way is to set up automatic deposits from each of your paycheques. That way the money is entering and accumulating without adversely affecting day to day life. Before no time, it’ll be time to spend two weeks in Tahiti!
Business Accounts
Individuals aren’t the only ones that want to save money. Businesses can also save money by using savings accounts. Even when money may not be sitting in your account for a long period of time, it’s worth grabbing the daily interest that can be accumulated rather than getting nothing out of it.
Business accounts will also get great benefits. Transaction fees are usually wiped out and you’re able to transfer money between accounts quickly without any delays or checks. This can be important because sometimes there are delays in accounting that can be really inconvenient.
