If you're saving your money, then you are going to want to make sure that every cent you are putting away into your account is getting you closer to your savings goal. Here's some tips from the Mozo money experts to make sure that you're set up from day one to earn the highest interest you can.
Why Go digital?
Not only are online accounts easier to access because you can do your banking 24/7, they also generally come with no account service fees and higher interest rates than standard branch access savings accounts. What's better than managing your money from the comfort of your home? While there may be limited transactions allowed with a high interest savings account, you can conveniently transfer money between your transaction and savings accounts online according to your needs.
What's a bonus saver?
To supersize your savings, you can look at earning higher interest with bonus saver offers. These generally require you to fulfil certain criteria such as meeting minimum monthly deposit conditions or making no withdrawals, but if you get an extra 3% interest for doing this it will be worth it. But be realistic, if you don't think you'll be able to meet conditions on an ongoing basis, you're better off looking for an account that pays a decent base rate of interest with no strings attached or alternatively, being a rate tart and chasing introductory rate offers every few months.
What's switch savvy mean?
Many banks have promotional offers which allow you to earn a high introductory rate for the first 3 to 6 months. This is a great option if you are looking for a short term investment, however, it can also work for a long term savings goal if you are willing to switch accounts every time the initial period runs out. While the process might seem a bit tedious, a real benefit of online banking is that you can switch accounts quite easily without having to visit the branch or even get off the couch.
Features to keep in mind while looking for a high interest savings account
Not all savings accounts are created equal so, here are the main things you'll want to look at when doing your side-by-side comparison of the high interest accounts on your shortlist:
- Interest rates: All savings accounts rates are variable and this means that they can go up and down depending on the market. If you want a set return on your money, you might want to compare term deposits as the interest rates on these are fixed for the term. And make sure you've compared the different rates and conditions that providers are offering as the interest you'll earn will depend on you meeting these.
- No extra fees: While most online high interest savings accounts have no account fees, if you need over the counter branch or ATM access with your savings account you may have to pay a fee for this. Sometimes it will be as per transaction fee or the account might have a monthly fee.
- Accessibility: With most high interest savings accounts your money will be at call, meaning you can withdraw your funds at any time. There is a type of account called a notice account that's a bit different however. With these accounts you will need to give the bank notice that you want to withdraw funds before you can take money out. If you opt for one of these, make sure that you can serve out the required notice period or have other funds available in case of an emergency.
- Automatic transfers: If your high interest savings account requires you to maintain a certain monthly balance in order to get a higher interest rate you will want to make sure you don't miss the deadline. Set up periodic transfers into the account to meet the requirement for monthly deposits through online banking.
- Linked account: Some banks may require you to have an everyday transaction account linked to your savings account. Sometimes this account needs to be with the same bank (and sometimes you can link to any bank account). If you are using both accounts from the same bank, make sure you check the fees and features of the new account as well so you don't end up paying extra money.