As a person’s finances finances becomes more complex over time – having a savings account that will fit your financial needs is important to keep in mind. Just like the Federal Reserve is performing stress tests to gauge the financial health of the banking system, you should periodically hold your savings accounts to the same standard. To evaluate whether or not you are using the right savings account you should review:
- What is the minimum balance you typically have in savings?
- If any, what is the minimum balance required by your bank to avoid fees?
- What is the interest rate you are earning?
- How is your interest rate paid (monthly, bimonthly, annually, etc.)?
- How often do you need to access your savings?
- What are the withdrawal limits for your account?
- Is your savings account an FDIC backed bank or NCUA backed credit union?
The above situations can change at any given time and just because you only have $200 in a savings account today, does not mean that you will not save thousands in the future. You should conduct your savings account “stress test” annually or based on any life changing moves, such as job promotion, loss of income, saving up to buy a house, starting a family, and similar such situations. By taking the proper steps and measures to periodically check in on your finances you can take the steps necessary for finding and opening the right account specific to your needs.