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Three Reasons to Open a New Savings Account

Do you have a one-way connection with your traditional savings account? Do you give and give, yet never receive what you require? We’ve all been in that situation. 

  1. You are entitled to more (in interest)

Sure, your standard savings account could have sufficed in the past. However, times have changed. The average interest rate for a typical savings account was recently stated by the Federal Deposit Insurance Corporation (FDIC) at barely 0.06 percent annual percentage yield (APY). That means that if you save exclusively through a bank savings account, you may only be receiving pennies in interest each month. You’ve earned it.

The good news is as follows: Switching from typical savings account with an average interest rate to a high yield savings account or a mutual fund account is one option to earn additional interest that requires a little bit of effort. You might earn up to 1.10 percent APY with a high yield saving or money market account. Will making the change assist you in becoming wealthy? No. However, it’s a very simple method to sit back and collect more interest on the savings you’re already making. So what’s preventing you?

There are usually limits on the number of transfers or checks you may write each month in high return savings and money markets. Is income in a savings account stuck? While money in savings isn’t “trapped,” high-yield savings accounts are ideal for funds that will be set aside and not handled frequently. Choose a bank that doesn’t have a reserve ratio limit (so you can start saving modestly) and doesn’t impose monthly maintenance fees. The interest amount can be calculated in this way through a saving account calculator.

 

  1. Your banking connection is no longer enjoyable

When you’re trapped with your current savings account, it’s difficult to get in the mood to save. Consider opening a savings account with a specific goal in mind to help you get energized and stay motivated. You may establish several goals, a free online savings account, for things like a vacation, a new car, your dream kitchen, or anything else your heart wants.

Goal-based savings accounts are particularly beneficial since they encourage you to save and pay for a specific item instead of putting it on a credit card that you’ll have to pay off later, with interest.

Even offers tiered savings rates. That is to say, the more money you save, the higher the interest rate you will receive. In fact, you can earn $10 for each person who establishes a savings account & adds to their objectives by referring them.

 

  1. You have huge ambitions and seek assistance in realizing them

You could do so much better if you used a regular savings account to save expressly for higher education (yours or someone else’s). According to a 2020 survey by Sallie Mae and Ipsos, 42 percent of families utilize general savings accounts to save for college, saving an average of $13,270. Meanwhile, 30% of families use 529 college savings plan to prepare for college, but those who do use one save almost twice as much – an average of $25,038.

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