Boost your savings power

Boost Your Savings Power

We have some tips and tricks for you to help you figure out if you have the right savings account for you, how to maximize your savings and how to get started. Please remember that any information we provide serves as a resource not as a substitute for advice from a professional.

Why take a second look at your savings account?

You could be able to switch to an account that pays higher interest.
You could possibly reduce or eliminate fees on your checking account
By shopping for an account you can find banks offering extras, freebies such as no-fee credit cards.

What should I look for in a Savings Account?
Check the APR (annual percentage rate). This is not only the interest rate but also how often it gets paid. If it gets paid once a year (simple interest) you would get a less interest than if you compounded interest daily or monthly.

How can I find the best Savings Rates?
You can find rates in National Newspapers like the Wall Street Journal etc. The Bank Rate Monitor is another resource. You can find them at: http://www.bankrate.com.
Check your local newspapers for rates for local banks.

What different kinds of savings accounts are there?
Passbook Account:

Records deposits and withdrawals in a passbook.
Usually open with small deposit.
Pays low interest
You could possibly only be able to bank during business hours.

Statement Account

Pays low interest
Usually an option of ATM access and direct deposit.

Holiday or Vacation Account

Requires regular deposits for up to 1 year.
Makes it easy to budget for a special occasion like a Christmas or a vacation.
Usually an option of direct deposit.

Money Market Account

Initial deposit and minimum balance are usually higher than regular savings accounts.
Interest rate is usually higher.
Check writing privileges, a free checking account, free ATM use are possible extras offered.

CDs

Pays higher interest.
A set amount is deposited, usually $500 or more, for a period of time.
The longer the period of time the CD is for, the higher the interest rate.
No additional deposits are allowed.
Penalties for early withdrawals.

Hybrid CDs

Usually lower interest rates than regular CDs, but higher than Money Market Accounts.
Additional deposits allowed.
Sometimes it allows you to make a few withdrawals during the term without a penalty.

How much should I have in my savings account?
A good measure would be to have enough to cover 6 months worth of living expenses, but at least 3 months. If your work situation is unstable or have other "big" items you know might hit, it would be nice to have up to a year's worth of expenses saved up.

How much should I save a month?
It all depends on what your goals are, how much you can spare a month etc. Do the math. If you have a hard time putting the money away, you might want to consider having part of your paycheck deposited directly to your savings account.

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