5 Things You May Not Know About Your Savings Account
For many people, a savings account is a place to stash money and let it grow. However, there are many things you may not know about your savings account. GOBankingRates spoke with Valeisha Douglas, bank teller and relationship advisor at Addition Financial, who shared five things people are often unaware of about their savings accounts.
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You may think a savings account is just a savings account, but there are different types, each with pros and cons. Some offer higher annual percentage yields (APY) when you maintain a certain balance, while others might have restrictions on withdrawals.
“This seems like a simple one, but you would be surprised how many raised eyebrows I get when I explain the different types of savings products we offer,” Douglas said.
If your money is sitting in a standard savings account, you may want to explore the different types offered by your bank and choose one that aligns with your financial goals.
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Have you ever noticed a weird service fee on your savings account? You may have dipped below the minimum balance requirement without realizing it. Douglas said that many people she has worked with have no idea there’s a minimum balance they must keep.
“Minimum balance requirements are something people should pay close attention to before opening a savings account if they don’t want a surprise service fee at the end of the month,” she explained.
While some banks waive such fees if you meet specific requirements, like setting up a direct deposit, it’s always wise to ask before opening an account.
Many people know that savings accounts earn interest but don’t know how much their accounts earn.
Douglas often talks to members who are aware that interest is being compounded but are not sure of the percentage or dollar amount. “This could be the difference between having your money in an account that essentially is holding your money and one that could be making you money,” she said.
That small percentage difference in interest rate means a lot for your wallet. That’s why it’s worth checking if your bank offers competitive rates or if you would be better off moving your money elsewhere.
“This one surprises a lot of people, but it’s true. Many savings accounts will allow you to get a debit card as you would for a checking account,” Douglas said. “The only difference is there are usually limits to the number of transactions per month you can do with the debit card based on federal Reg D laws.”
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