While different features will suit different people, here’s a bit of a checklist of things you may want to look out for when choosing the savings account for you.
- Is the interest rate attractive?
Savings accounts can make you money by earning you interest on the savings you’ve put away. This is why a higher interest rate can make a big difference, particularly as you deposit more money along the way.
With that in mind, when you’re comparing savings accounts, it’s worth looking at not only the introductory rate, but the ongoing rate as well. Reason being, some providers will offer a great introductory rate, but this could be reduced to a not so great ongoing rate after several months.
Some banks offer customers a great ongoing rate but require multiple conditions to be met. Common conditions include a minimum monthly deposit, or no withdrawals to be made. Customers should be certain they can meet these conditions, otherwise they will earn a much lower rate for that month.
- What fees might I be charged?
If you’re trying to save money, you probably want to avoid as many fees and charges as possible. These may include anything from monthly account keeping fees to withdrawal fees. So, when it comes to comparing accounts, make sure you’re across any potential fees your provider may charge you, including where fees may apply for special services.
- How easily can I access my money?
Some savings accounts may limit your ability to access your money to help you avoid dipping into your savings. For instance, savings accounts generally don’t come with debit cards or ATM access. However, because accessing your money may be important to you (particularly at short notice), looking into how you can access your money could be worthwhile when choosing an account.
You may want to see whether you’re able to link your savings account to a transaction account with a debit card, as this could make any withdrawals or payments you need to make faster and simpler.
On top of that, check out mobile banking apps and online banking features different providers offer, as having online and around-the-clock access to your account might also be something you want.
- Do I have to make minimum deposits or maintain a certain balance?
Depending on the provider, you may need to make minimum monthly deposits or maintain a certain balance to avoid potential fees or losing any potential interest rate benefits. This is worth investigating, particularly if may go through a period where you don’t have the money to make the minimum monthly deposits required.
Some providers may also only pay high interest up to a certain balance. Once your savings reach this balance, you may only receive a marginal interest rate.
- How safe are my savings if I choose a certain provider?
Depositing with a bank, credit union or building society will probably mean you are protected by the Australian Government’s Financial Claims Scheme, commonly known as the Government Guarantee, up to a combined $250,000 with that organisation. Check to make sure your deposit will be covered. This is usually outlined in the terms and conditions or product disclosure statement of the product you are considering purchasing.
You might also want to look into secure internet banking, fraud prevention measures and any money-back guarantees for unauthorised transactions.