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Article | Read time: 2.5 minutes
Let's talk about making your money work for you with interest and savings accounts. When you put your money in a bank, they pay you something in return — interest. And savings accounts are like special bank accounts that give you more interest than a checking account. It's like a little boost for your money!
Here's the kicker, there are all kinds of savings accounts out there, each with their own benefits. So, before you dive in, here are a few things to consider:
- Interest Rate: This is the big one! A higher interest rate means your money will grow faster.
- Minimum Balance: Do you have to keep a certain amount of money in your account? If you go below it, you might get a fee.
- Accessibility: How often will you need to access your money? There are limits on withdrawals for some accounts, so make sure it works for you first.
- Fees: Some accounts have fees, like monthly charges or ATM withdrawal fees. Be mindful of those!
Now, let's review – the types of savings accounts:
Traditional Savings Account: Simple and flexible. This can be a great option to earn interest but still have access to your funds if needed.
High Yield Savings Account: This one's like the turbocharged version. It offers a higher interest rate, but there might be a few fees or balance minimums.
Money Market Account: Think of it as a mix between a savings and a checking account. It gives you a better interest rate and even lets you write checks, but it usually requires a minimum deposit and has some limitations on withdrawals.
Certificate of Deposit (CD): It's like a savings account with a twist. You put your money away for a set time, and in return, you get a higher interest rate. Just be aware you can't touch that money until the time is up.
Which one's right for you? Well, it depends on your goals. If you want the most interest, go for a high yield savings account or Certificate of Deposit (CD). If you need quick access, a traditional savings or money market account may be a better choice.
Some extra tips before you start:
Set goals. Are you saving for something short-term or long-term? Think buying your first car vs. saving for retirement. Deciding on your goals will help you pick an account that aligns with them.
Be patient. Saving takes time. Keep putting money in, and over time, you'll see it grow.
Interest rates change often! Be sure to take advantage of high interest rates when they're available.
By understanding how savings accounts and interest work, you can make the right choice for your money and start growing your savings. Happy saving!
Still have questions? We’re here to help! A Personal Banker from FNBO can help you set up a savings account and assist you in tracking your savings along the way.
The articles in this blog are for informational purposes only and not intended to provide specific advice or recommendations. When making decisions about your financial situation, consult a financial professional for advice. Articles are not regularly updated, and information may become outdated.