How to Get Started Saving

How to Get Started Saving

We all know that saving money is important, but not all of us know how and where to start. Since there are so many different savings options to choose from, you’ll want to compare some of the more common features of each first.

Before choosing your savings account:

1. Do your research. Different banks offer different products. In order to make your money work for you, you’ll want to choose the best option for you.

2. Budget. Make a plan – something both affordable and attainable – and follow it.

Here’s what you need to know about savings accounts:

Interest rates

Some institutions offer more bang for your buck than others. Virtual banks like ING Direct, PC Financial and Ally offer even higher rates than the average bank because they have fewer overhead costs.

Monthly fees

The best savings accounts will allow you to deposit and transfer funds online for free. Some will charge monthly fees for this privilege. Since the goal is to save money, you might want to choose a bank that takes your goal seriously and allows you to save fee-free.

Amount of Money

In order to qualify for their best interest rate, some banks require you to keep a minimum balance. If you plan on keeping a lot of money in your account, it’s in your best interest (pun intended) to negotiate a higher interest rate with your bank.

Service

Different banks offer different services – and usually, but not always, the features included are reflected in your interest rate. Some institutions operate strictly online, while others have tellers who can help you with your transactions. You’ll want to look closely at the services provided and decide if they fit your needs.

Features

Banks are offering more and more features to attract new clients. Some will allow you to track your spending. Some will offer incentives in the form of gift certificates or sign-up bonuses in exchange for your money.

An Interesting thing about Service Fees

If you had to pay a $2 toll every time you used the elevator at work, would you keep using it? Depending on how much time and energy you had, you might. But I’ll bet you’d take the stairs more often. Now what if there was an elevator just around the corner that allowed you to ride as often as you wanted – for free?

You’d have to be pretty thick to keep taking the first elevator, wouldn’t you?

Some savings accounts are like that first elevator – they take your money every single time you use them and they’re offering the exact same service as the next guy. So why is it that you wouldn’t be caught paying to take the elevator several times a day, yet you’d pay unnecessary fees on your savings account?

Types of Fees

Depending on the institution and the type of account, you may have to pay for the following services. Assess which ones you need, and which ones you don’t.

Monthly fee

Although this type of fee is slowly disappearing now that online banking
is an option, some banks charge a monthly fee just for the privilege of using their services.

Assisted transactions

Anything done in the bank or over the phone is considered an assisted transaction.

INTERAC transactions

Whenever you purchase something using debit or withdraw from your account using another bank’s ATM your bank will likely charge you a fee.

Email money transfers

Transferring money via email is becoming a popular feature, and most banks charge a nominal fee to do this.

International transactions

Any transaction made outside of the country. Be careful; you can incur heavy fees for doing this.

Account history

Sometimes just asking for additional information about your account can incur a fee.

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