Shopping for Savings Accounts
It is undeniable that saving money for future emergencies and obligations help a lot in easing out the hassles of looking for borrowing opportunities to size up financial situations. In this world of economic downfall, there is a need for every individual to find out means in order to set aside a few amounts which will earn interest rates and other savings perks.
Whether the intention is for short term or long term basis, it is important that the consumer should be able to consider the frequency of accessing the account. If you are one person who can commit to not accessing the money for a very long time, then you should choose the savings accounts with high interest in terms of certificate deposits. In this case, the longer you leave your deposits untouched, the higher the CD interest rates would become.
Moreover, most certificate of deposits impose penalty to those who tend to withdraw the money before the account has reached the term. This means that once you have engaged in CDs, then you should be willing to wait for the maturity period. If you think that you need the money in cash form anytime soon, then this kind of banking will not be good for you because the penalty would be higher than your supposed interest earnings.
On the other hand, if you plan to access the money once in a while, then you should open with the Money Market account. This kind of scheme will allow you to earn high interest rates and to write checks every monthly or quarterly. There are some banks that charge you with some fees entailed with the writing of the check. This kind of savings mode is a lot better than the ordinary kind of bank account which you access every time you make a purchase.
Compared to CDs and money market, the ordinary savings account may have a little interest rate but will assure you that no penalty or fee is imposed once you decide to withdraw. The rates would definitely depend on the amount of money you saved. This kind of account will best fit those people who are more inclined to withdrawing their money any time they wish.
There are a lot of things to consider when opting for a savings account. After knowing the frequency of access to your money, the next thing you need to do is to analyze the interest rates. How much interest is being paid for your saved money and if these rates are compounded are just a few of the many questions you need to answer. Deciding for the bank where you can place your savings would be easy if you compare the Annual Percentage Yield (APY) being offered.
