Should you open a savings account?

The decision on where to place your savings is a big one so if you’ve decided against keeping you cash in a shoebox under the bed then you’re probably leaning towards opening a savings account.

Savings account options

Most people opt to put their money into a savings account and as many things like salaries and other payments to you are transacted via direct debit these days, it is a more practical option. The most common types of accounts today are:

  • Online savings accounts
  • Everyday accounts
  • Cash management accounts
  • High interest savers

Your daily financial movements will give you a fair idea of what type of account you should open. Look for one that meets all your banking requirements and then shop around for what you want. Talk to the banks and ask them about their savings accounts.

Opening a savings account

An everyday working account suits most people but if you have a lump sum just sitting around you might want to consider putting it where it’s going to do you the most good.

This is where high interest savers, term deposits and cash management accounts come into their own. These types of savings accounts are a great place to put your money as the interest rates are usually very attractive. They are especially good if you have sufficient funds to leave more in the account than you would need to withdraw. With the exception of a term deposit, these accounts still allow you to access your money when you need it but by keeping the balance at or above the minimum amount, you will be able to evade most bank fees and be rewarded with higher rates of interest as well.

Talk to your bank about their online savings accounts. These offer you 24 hour banking, are easy to operate and usually pay a competitive interest rate as well. Many people are changing to online banking as you can’t beat it for convenience.

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