Terms and agreements when opening a savings accounts vary from bank to bank. Before you open one (you can either do this online or face-to-face in your local branch), be sure to do some research to make sure you find the best account out there.
Here are some questions you should ask a banker before you open a bank savings account:
1. Will the bank charge fees on the account?
Banks can charge regular service fees on saving accounts; they can also raise these fees over time. Be sure to shop around for banks that do not charge regular fees on their accounts.
2. Is there a minimum balance to keep the account open?
You may find that banks will not charge the sorts of fees mentioned above if you agree to uphold a daily minimum balance. Be sure to make note of this balance and avoid it; if you go below the minimum balance you could get hit with a fee. Although, extremely simple and hassle free, transfers between your local bank branch to your online account and back may take a couple of days to post. Consumers should be aware of the time delay if they need to access their money immediately as this can cause your balance to drop below what you would expect.
3. What is the interest rate?
Interest is the amount of money your bank pays you to have a savings account with them. The interest rates earned on savings accounts are low compared to investment accounts (i.e. bonds, CDs, etc.). Banks desperately need more money to lend out to other customers–after all, it is by lending money that banks make their profits–so many are tempting customers with highly competitive interest rates.
This is going to be one of the most important aspects of your new savings account, and it is one of the most important reasons for doing as much research as you can before opening a savings account.
4. Is there a minimum balance required to open the account?
Many online banks require a minimum of $1 to open a savings account. Once the account is opened the banks do not impose minimum balances or monthly fees onto their customers.
A savings account works for two reasons. The first, is by encouraging people to save by stashing money away where it is less easily accessible. Secondly, savings accounts allow the principal to grow because the money stashed away can earn interest. In general, savings accounts are one of the first steps needed for individuals to build a financial history and eventually some type of savings.
Savings accounts are most efficient when the bank holder is committed to saving and taking advantage of all programs offered by banks – such as, direct deposit, automated scheduled transfers, etc.
