It isn’t very difficult to find a bank that advertises “free” savings accounts. Everyone loves free stuff.
You may have believed you held a free savings account, too, until you began reviewing your statements. Many savings accounts are really only considered to be free after certain requirements are met.
There are three common circumstances that make a free savings account costly to hold:
#1. It requires monthly maintenance
Banks charge monthly fees to cover the cost of maintaining your account. This service fee is often waived as long as you manage to keep a set minimum balance, thus making the account “free.”
#2. You don’t meet the minimum balance
Many accounts, including savings accounts, actually require that you maintain a minimum balance. If you drop below it, you are charged a fee. You will often continue to incur a daily fee until you raise the balance again.
#3. Too many transactions occur
Some savings accounts, especially high interest savings accounts, place a limit on the number of transactions allowed per month. Too many withdrawals or transfers will result in penalties.
How to Keep Your Savings Account Free
So how do you get around these fees and enjoy a truly free bank account? One option is to open an account with no maintenance or transaction fee that will likely pay a lower rate and keep your balance above the minimum. Or, you can obtain a savings account with absolutely no fees associated with it at all. The best place to find these accounts is online.
Some of the best savings accounts exist online. Technology is making it easier for banks to save money and then pass those savings on to consumers. Savings are enjoyed in the form of fewer fees and higher rates.
If you are interested in obtaining a savings account that is totally free and will also earn a higher interest rate, check out Go Banking Rate’s online savings account comparison for options.
