What to Know When Opening a Savings Account

Opening a savings account is certainly a great first step towards financial freedom. But if this is your first savings account, there are important things to consider before making the commitment. Today we’re going to share 4 things to know before opening a saving account.

1. Minimum Monthly Balance

The entire goal of opening a savings account should be to save money. As such, many banks expect saving account holders to have a minimum monthly balance or to deposit a certain amount of money each month.

Falling under that balance can lead to fees, a lower interest rate, or no interest paid for every month you don’t meet the minimum requirements.

2. Services Offered

Every savings account isn’t created equal. Each bank will offer different services to entice its customers.

It’s up to you to find out which services you will benefit from the most and by which banks. For instance, does the account also offer a debit card? What about mobile banking?

3. Frequency of Withdrawals

Once again, the goal of a savings account is to enable you to save money. That being said, many banks will only allow a set number of withdrawals each month to prevent customers from taking too much money out of their savings account.

If you don’t plan to make withdrawals, then this shouldn’t be of too much concern. However, if you plan to withdraw relatively frequently it’s important to shop around to see which accounts offer the most withdrawals.

If you can, find any that offer no penalties so you can focus on saving rather than losing money.

4. Account Related Fees

Most banks have fees. But it’s important to get an understanding of what fees you will be assessed on your account and how much. This will help you determine your ability to save in the long run and whether the savings account will meet your expectations.

Some of the fees you can expect include:

  • ATM withdrawal
  • Branch Deposit
  • Over-the-Counter transactions
  • Cash Deposit fee (if at a different branch)

If you’re planning to open a savings account, it’s important to look at the type of services offered, what’s required of you, and any related fees. Doing this will help you choose the right savings account that fits your needs and situation.

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