What’s the best way to save money?
Putting your money in a savings account, surely? Funnily enough, this isn’t always the most optimal way of storing your wealth. Savings accounts exist for a good reason, and they will always be above a regular checking account. Still, you may want to think twice before instantly putting your money away in one of these accounts.
What is the interest rate of your savings account?
When most people open a savings account, they tend to just select whatever one their current bank offers. But, this usually gives you a very poor account with an incredibly low interest rate. Ironically, in other areas of your life, you will kill for a low interest rate. However, when you are saving money, you want the interest rate to be as high as possible.
It will mean that you gain more money over time.
So, before you put your money in a savings account, be sure to look around and compare interest rates. Some accounts will have much better rates than others – and remember to look for ones that cater to your needs.
For instance, some banks may offer joint savings accounts for you and your partner, providing a substantially better interest rate than a solo one. Take advantage of things like this to help you save more money.
What are the terms and conditions of your savings account?
The interest rate isn’t the only thing to pay attention to – you also need to look at the terms and conditions. Some savings accounts have conditions whereby you can’t touch the money in your account until a certain point. Or, if you withdraw any funds, you face a penalty fee and the interest rate drops.
They usually do this to stop you from moving your money into a better savings account that might open up from a rival.
Regardless, you should be wary of all the T’s & C’s before opening an account.
Do you have to deposit a set amount of money every month to keep the account open? Is there an account limit? Very quickly, you will notice which savings accounts are better than others.
What are the other options?
Lastly, remember that there are alternatives to saving your money in a savings account. The best thing to do is talk to a financial advisor like Glen Clemans for more clarity on the other options.
This could include IRA’s, pension funds, investments, real estate, and all sorts of other things. Speaking to someone with vast financial knowledge will help you figure out the best and most efficient way of saving money. It may surprise you just how wasted your money could be in a savings account.
Realistically, it does make sense to keep some of your savings in a savings account.
Just be sure it has good interest rates and terms that favor you. Alongside this, you should also look to have money in different pots. Never keep all of your savings in one place if you want to maximize their growth!