04.05.2023 By Amy Miller, AFC

Choosing the Best Savings Account

Taking the time to review a financial institution's account features and benefits is imperative when choosing the best savings account and trying to make smart money decisions. While banks and credit unions differ from each other, they both offer a wide variety of products and services. With a little time and research, you can find a savings account that is right for you and how you like to do your banking. Here’s our list of the top 5 things to consider when choosing a savings account.

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1. Security: You’ll want to be sure the institution you are banking with is trustworthy and that your money is safe and sound. To do so, you’ll need to check to see if they are insured by the Federal Deposit Insurance Corporation (FDIC) for banks or the National Credit Union Association (NCUA) for credit unions.  

You can check the FDICs BankFind database online or by calling 1-877-275-3342 to see if a bank is insured. When using a credit union, you can check the NCUAs find a credit union online tool. Both will allow you to search records, gather information and verify deposit insurance coverage.  

2. Minimum Balance Requirements:  Many savings accounts will require that you either maintain a minimum balance, meaning the funds in your account cannot drop lower than a set amount, or pay a monthly maintenance fee. Some institutions may waive the minimum balance requirement with direct deposit or auto transfers. You’ll want to know what the requirements are before choosing a savings account.   

3. Fees: Financial Institutions often charge fees for maintaining a savings account with them. This could be a one-time fee or an ongoing monthly fee and could be charged based upon the balances you maintain, the number of transactions you conduct, ATM usage or for overdrawing and creating NSF (non-sufficient funds).  Review what fees will be or could be charged, when they are charged, and if there is a way to avoid the charge like by maintaining a certain balance or only using certain ATM locations. You’ll want to know that you are either able to pay the fee or have it waived based upon your activity and balances.   

4. Interest: Compare the interest rate and APY (Annual Percentage Yield) the account you are considering will pay. Although regular savings accounts traditionally do not pay a high rate of interest, even small amounts add up and you’ll want one that is paying a decent rate and will help your money grow some in order to meet your savings goals. Typically, savings accounts are not ideal when trying to grow your nest egg but are really more of a holding place for things like an emergency fund or for saving for expected expenses. When trying to grow your money, you’ll want to look at other types of investment vehicles what offer better returns.  

5. Locations & Convenience:  First, think about how you like to do your banking – do you prefer a brick-and-mortar branch that you can walk into and be helped with your transactions or is an online bank with remote deposit more convenient? It all comes down to what is important to you and what works with your lifestyle. You’ll want to know how, where, and when you can make deposits or withdrawals. Look at the locations of branches and ATMs if you’ll be using one.  

The U.S Dept of Veterans Affairs (VA) has partnered with the Association of Military Banks of America to create the Veterans Benefit Banking Program (VBBP) that offers Veterans and their beneficiaries more banking options. You can find a participating bank by searching here.   

Take the Veteran Saves Pledge today. It’s the first step in creating your personal savings plan. We’ll send you tips, resources, and information that will help you reach your savings goals.