Saving for that dream holiday or to buy your first home? A savings account could be the way to go as they’re designed to help you build your nest egg over time by allowing you to earn interest on the money you’ve deposited into the account. Typically, they offer a higher interest rate than an everyday account – which equals more savings for you.
Savings accounts also sometimes come with withdrawal fees and monthly withdrawal limits to encourage you not to take out money. Unlike a transaction account, which you generally use for day-to-day expenses, a savings account is usually used to grow your savings over the long term. As with any type of bank account, you want to make sure that the option you choose offers a good amount of flexibility and the right features to help you meet your savings goals. When you’re shopping around for a savings account, consider the following:
The interest earned on your balance can help you meet your savings goals faster, so it’s important to consider the rate on offer when choosing an account. Some banks and financial institutions also offer introductory interest rates or bonus rates if certain conditions are met, such as monthly minimum deposits and minimal-to-no withdrawals.
Be aware that some banks and financial institutions charge fees for withdrawing money frequently, which can eat into your savings over the long term. Look for a savings account with no establishment or account keeping fees and choose a savings account with a structure that fits with your savings goals. For example, if you want more encouragement to save and not touch your money, you might want to choose a term deposit account with penalties for early withdrawals.
Some savings accounts come with a monthly minimum deposit – meaning you have to deposit a minimum amount each month to avoid getting hit with a fee or to qualify for a bonus interest rate. Some people prefer to have a minimum deposit as an incentive to stick to a savings plan. However, if you plan on depositing money infrequently, you might want to choose a savings account with no monthly minimum deposit and a higher base interest rate.
Financial goals should help you decide on the type of savings account you need. For example: if you are putting money aside for six months to go on a holiday, an account with a high introductory rate but lower standard rate might suit you. On the other hand, if you’re saving for a house deposit over a few years, you may want to look for a long-term savings account or term deposit with a more stable interest rate.
At BOQ Specialist, we offer two types of savings accounts to suit different financial needs. Our 32 day notice account makes funds available to you with 32 days prior notice and offers a competitive interest rate with no monthly account-keeping fees. Our private access account makes funds available on demand and also comes with a competitive interest rate and no monthly account-keeping fees. Find out more about our savings accounts and apply online in minutes.
The information contained in this article (Information) is general in nature and has been provided in good faith, without taking into account your personal circumstances. While all reasonable care has been taken to ensure that the information is accurate and opinions fair and reasonable, no warranties in this regard are provided. We recommend that you obtain independent financial and tax advice before making any decisions.