We all know that when you’re in the market for a new car, a new piece of electronics or some furniture, you shop around, but we often don’t apply this mentality to our savings and investments.
Savings account rates aren’t that impressive these days, especially at a brick and mortar institution. While it’s great to have the convenience of walking into a building, speaking with a representative and interacting with people who know and recognize you and your needs, if that’s the only place you have a savings account, then you’re probably missing out on higher interest rates. The banks with the highest interest and lower fees are usually online these days.
I’m still all for having an account with a local bank, since you never know when you’ll need something like a cashier’s check, and I feel better depositing large sums of cash directly into the ATM for my bank. However, I only keep a small amount in a checking account with my local bank.
The vast majority of my savings are in two online banks, CapitalOne360 and Barclays Online Savings. They’re just two of many online options available, but as a general rule of thumb, you can often find higher interest rates with online banks.
You want your interest in your savings account to compound daily, since that will help it to grow faster. You also want to shop around and see if you can find savings account that do not require minimum balances with an interest rate around the 1.0 percent range. Barclays is one of those banks. However, if you qualify with certain credit unions, you may even be able to beat the 1.0 percent interest and find something higher.
Credit unions can be an excellent choice. Often the biggest credit unions can be joined by anyone and offer plenty of ways for you to be able to access your money. The website asmarterchoice.org can offer more information about what’s available to you.
To max my savings further, the checking account I use is with Ally, which has no fees, refunds up to $10 in ATM fees a month outside their Allpoint ATMs and a whopping 0.10 percent interest on balances under $15,000 and 0.60 percent interest on balances over that. Yes, that is extremely low, but it’s still notable that they even offer interest for their checking accounts.
Another great feature from Ally is that if you accidentally overdraft, you only get dinged by one overdraft fee ($25) per day, rather than per transaction. Five minutes of reading through the website can teach you a lot about each of those features.
Since you know your spending habits best, shopping around to save money with your bank can be about more than just interest rates. Are you a chronic overdrafter? If so, stop doing that! But until you do, you’ll clearly save the most money by banking with an institution that has the lowest overdraft fees that reoccur the least number of times once you trigger it.
Are you constantly hitting up the ATM to get cash? You want to make sure your bank has a huge ATM network so you’re not nickel and diming yourself regularly with the $2 to $4 ATM fees a few times a week.
If going from website to website to check out banks seems too daunting, there are two shortcuts your can take too. MagnifyMoney has a great section to help you compare checking and savings accounts to make sure you’re getting the best interest rates with the lowest fees. The site also takes into account if you never, sometimes or often go into overdraft. Even more impressive is that they cover quite a few credit unions, too. It’s an extremely easy to use website to help you get your finances into better shape.
If you’re not already using Mint to keep your budget in shape, you are making life a lot harder than it needs to be. Once you link in all your accounts, Mint has a feature called Ways to Save that finds banking options that are better than the ones you’re using and shows you how much you’d save each year by switching to them. It’s also free.
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How to Shop Around for a Bank to Max Out Your Savings originally appeared on usnews.com
