We are all too familiar with the service fees and charges that banks charge, from money orders, teller fees and ATM surcharges our savings institutions can be putting serious dents in our ability to budget and save. Let’s see if your bank is right for your budget.
Banks Are Still Your Safest Bet.
Despite the banking crisis in 2008 banks still remain the safest bet for stashing away your savings. In wake of the financial crisis the Federal government increased depositor insurance to $250,000 per depositor. Consumers pay for having the convenience of a banking account and that convenience breaks down into additional fees.
Interest Rates and APY
Keep in mind that not all interest rates are created to be equal. They use differing methods to calculate interest and to find out how much money you earn out of different accounts you want to ask your bank for each account’s “annual percentage yield” APY’s are calculated in the same manner everywhere and will give you a better idea of the amount of money you will earn on interest.
Alternative Ways to Save
Banks are not the only way to save and earn money. Certificate of Deposits (CD) offer guaranteed rates, are insured and offer a good return on your investment. A CD must be locked into for a period of 3 months to 5 years but if interest rates fall before your CD expires banks are required to give you the rate it quoted but if it climbs you are stuck with the lower rate.
Online Banks and Money Market Accounts are an option to a traditional bank. They typically pay more than banking accounts and your money is not tied up for a set period of time.
Take a look into the various fees and services you are being currently charged. ATM fees alone can take a significant chunk of what you earn and shop around for better options so you can maximize your savings and find those good interest rates.
Source: http://money.cnn.com/magazines/moneymag/money101/lesson3/index.htm