How saving accounts work
Bank saving accounts are the most common accounts that allow holders to earn interest on their money for the entire period the money is kept in safe custody in the bank. To earn account interest savings, there are minimum requirements that must be met such as minimum account balance and a requirement to save the money for a given period of time. However, some accounts have no such requirements and account interest savings largely depend on the type of the savings account held and the specific bank in question.
Types of saving accounts:
Before advising you on how to improve your accounts savings interest, it would be best to inform you first of the types of savings accounts available. There are of two types, there is the money market accounts and the basic savings account. The money market account usually earns you the most accounts savings interest, but under the condition that you have more cash in your savings account.
There is also a limit to the number of withdrawals that you can make on the account. With money market accounts, you are only allowed 3 cheques in a month. A basic savings account, usually earns you low accounts savings interest, there is also a very low minimum balance requirement in maintaining the account. Basic savings accounts usually allow you to withdraw any time.
Costs involved in savings accounts:
The idea behind banking is to see your money grow; this is possible by increasing your deposits or an increase in your accounts savings interest rates. Increasing your deposit is dependent on your sources of incomes, your accounts savings interest rates depend on the type of account you are having.
There are some costs which are involved in banking that you should be keen on, because the costs might be high to the extent that they eat up to your account savings interest, that you have earned. You should use these costs in selecting a bank to set up your account. The main costs are usually withdrawal costs, fees and accounting services charges for your account, minimum balance requirement fee and the interest rate paid on your balance.
8 tips for account interest savings:
Here are a few tips to help you increase your account savings interest, start saving early, interest is usually calculated per annum thus the more time you save the more interest you will have accumulated. Deposit money into your account as often as possible, this increases the principle amount and thus increasing the amount of interest.
Try and avoid removing money from your account before the stipulated time, removing money earlier reduces the principle thus reducing your interest to be earned. Include savings in your monthly budget so as to maintain a flowing deposit tendency.
Study well your bank policies to know which fees you are being charged; this will help you in selecting an account that enables you to, earn your full account savings interests. Seek professional guidance to ensure you get the best deals and rates possible. Try and reduce your credit and debts. Finally, try and employ the simplest rule in banking, which is being patient!