Make More Money From Your Savings Account

To attract customers, banks regularly offer all sorts of rewards for those who are opening a savings account. It's time to sit back and let banks woo you with tempting perks. But don’t get too carried away! Choose rewards that are right for you and will help you minimize the fees you may incur with your new savings plan.

Rewards to Perk You Up:

Interest. As consumers, we're all used to paying interest on credit card purchases, cars, and mortgages. But various savings accounts serve as vehicles to deliver interest to you. Makes a nice change! In the case of savings account, the financial institution you choose will pay you a fee for the money you store away with them. Generally, the longer you store your money in a savings account, the more interest you are likely to earn (see section on “Compound Interest” above). When you use a savings account, you’re essentially allowing the bank to borrow your deposits for set amount of time, and in return you earn money on your investment in their institution. For the best interest rates, find a savings account with a high Annual Percentage Yield (APY). Then sit back and watch the interest pile up!

ATM Access. Basic savings accounts with credit unions and banks—large and small—typically offer consumers access to deposited funds using bank-issued cards that allow access at automated teller machines. ATM access is convenient for individuals who typically bank with cards. Depending on the financial institution, ATM access varies. Credit unions (those smaller, member-run financial institutions) typically provide less ATM access, than, say a large national bank. This could be a pro or a con depending on your outlook on access. (Maybe you want to resist temptation by having fewer options from which to withdraw money? Then again, maybe greater access to ATMs will increase the likelihood of your making more deposits.)

However, since a savings account is least likely to be used for daily purchases, ATM access may not be important. But, if you like to deposit funds using checks, then look for a financial institution that has greater ATM access.

Online Statements. Ten years ago, mailed statements accompanied by canceled checks and a lengthy, detailed report of your purchases was the primary way to keep track of your bank accounts. Now, technology offers the privilege of viewing accounts online using user identification and a password. This new technology offers a digital window into how your money is performing. You can keep track of withdrawals, deposits and interest earned, all from the comfort of your couch. Or, if the interest earned on your savings is giving you the opportunity to travel the globe, you can gain access to your account across the waters—or, on the waters, if you find yourself, perhaps, on the Queen Mary II using the Web.

Email Alerts. In an effort to help curb fraud, many financial institutions are allowing its customers to sign up for free email alerts for everything from recent withdrawals to stock price changes. These alerts can help you keep track of any change to your account. So make sure you sign up for these alerts if your institution offers them and don’t set these emails as spam—read them!

Linking. Typically, an overdraft fee is something to worry about with a checking account as well as a savings account because your objective is to, well, save. But, many banks offer the option to link savings and checking accounts to avoid overdraft fees. Overdraft fees are usually around $30.