Since there are so many traditional and online banks and other financial institutions offering a variety of savings solutions, it’s important to know how to compare savings accounts and what to look for in a good one. Interest is obviously an extremely important factor, as well as customer support, minimum payments, the reputation and quality of the bank, and a few other factors.
Most traditional banks with branches in multiple locations usually are unable to provide high APY rates. It’s the online banks that have the ability to do so, so these are the ones you might want to start your search with. You’ll definitely want an account that offers more than 0.5% APY rate. Online banks tend to offer more than 1% – some even offer 2%.
As important as APY is, it isn’t everything – especially if you don’t have very much to put into the account. There is usually a minimum amount requirement, and that requirement can be high with certain banks. Not only might you be required to put in a specific amount of money, you’ll also be expected to maintain a certain amount each month, and will be charged fees if you fail to do so.
Keep fees, investment requirements, and any other kind of expense in mind when you compare savings accounts. Ideally, choose one that offers the highest APY and no unnecessary fees for the amount of money that you know you’ll be able to safely keep in the bank. Unless you’re opting for a Certificate of Deposit account, you shouldn’t be required to keep the money in the account for a specific amount of time, and won’t have to pay a penalty for taking it out early.
Compare Savings Accounts by Interest Tiers
There are also “Interest Tiers” some financial organizations offer, with different levels of interest rates depending on which tier you are a part of. Sometimes there is an introductory period during which you will get the promised APY rate, but that rate might go down after that period is over if you don’t continue depositing more money into your savings account.
If you really want to go all out when you compare savings accounts, make sure you read all of the terms and conditions. It’s important that you get a detailed understanding of what each bank offers. Customer service is extremely important as well. How easy would it be to get a hold of a representative if you ever need any assistance?
Lastly and most importantly, you need to make sure any account you open is backed by the FDIC. You’ll probably notice when you compare savings accounts is that there is typically a limit of $250,000 that can be insured. One good bank that you might want to consider is CIT Bank. It offers a few Interest Tiers and a high APY.