Should I Switch To A New Savings Account?

Everyone needs to have a savings account. This basic bank account is the best way to keep your money accessible while simultaneously making your savings grow. You probably use your savings bank account to hold onto funds for everyday spending and to save up for larger expenses. But when was the last time you considered your savings account and checked if it was the best option for you? Find out if you should switch to a new savings account by taking a look at these five key areas.

 

Interest Rate

The interest rate is the amount of interest you will earn on the money in your savings account. This is how your savings grow without you needing to do anything. Each month, the bank will pay you interest, which is a percentage of how much is in your account for that time. Although interest rates on savings accounts are usually not very high, it can still make a difference to your overall funds.

 

Fees

Different savings accounts will incur different fees. When thinking about switching savings accounts, it's a good idea to choose one that has the lowest fees possible so that your hard work of saving is not undone by paying lots of fees. Plenty of banks offer savings account with no fees attached to them at all. Others will incur monthly account fees, branch deposit fees, and transaction fees for online purchases, EFTPOS or over-the-counter transactions.

 

Special Offers

When looking at new savings account options and considering both the interest rate and the fees, make sure that the information you're looking at is on an ongoing basis and not a special introductory offer. Some banks will offer higher rates for a set time period, and then the account will revert to a lower base rate. There can also be higher interest rates with certain conditions attached, such as not withdrawing money for a set period of time.

 

Features

If you love doing your banking online, you will want to choose a savings account that is linked to a bank with a good online system. Most banks these days will have a mobile app where you can track your spending, but the functionality of these differs greatly between providers. For example, some may offer the option to set savings goals for specific purchases or events, to bundle savings into different categories, and to track spending across type.

 

Accessibility

As mentioned, most people don't use their savings account simply as a place to store money- it is normal to make withdrawals for spending either on a regular basis, or for special occasions. Make sure that this is going to be easy for you and that you won't incur any penalties for taking money out of the account. If you do have a large amount of money in your savings and you're not planning to use a portion of it, you may like to consider moving these funds into a term deposit instead.