Best Savings Account

Simple and straightforward, many people do not really think much about savings accounts. They are basically a low-risk investment option for your money and with relatively low return. One can even say that the low return is what exactly what you deserve for refusing to take a risk.

But that was before. This is now. These days, much has changed with the way savings accounts work. Where banks used to provide you with rates of up to 1% annually, today you could be facing rates of up to 4%. That’s basically doubling your savings and without even the risk that usually accompanies a high-yield investment.

If you want to take advantage of this trend in savings accounts rates, finding the best savings account therefore is the first order of the day. This means, of course, that you will have to dig really deep, going beyond the headline figures in order to get the best savings account rates.

The first step is to distinguish between the two basic types of savings accounts: notice accounts and instant-access. Notice accounts, as its name implies, requires you to give notice, usually at least four months’ prior to withdrawing your cash. Instant-access, on the other hand, allows you to withdraw the cash anytime without need of notice or a waiting period.

In traditional banking, the best savings accounts are the notice accounts since they offer the highest rates. People who are looking for the biggest possible return on their savings would naturally open notice accounts, as opposed to instant-access ones.

However, times have changed. While notice accounts continue to provide you with high rates, instant-access accounts are beginning to offer more competitive rates. Now, when you add to that the benefit of “instant money” available with an instant-access, then it is rather obvious that the best savings accounts today are instant-access ones.

The next step is to determine if a fixed rate savings account is a good option, or you are better off with a regular savings account. If you are planning to save money on a regular basis – say, you want to keep a portion of your monthly income – then the best savings account for you is a regular one.

Regular savings accounts typically have higher rates. The only condition is if you regularly put your money in your account and do not make frequent withdrawals.

However, if you have a lump sum of money and you do not expect to use it for a short period, then the best savings account for you is a fixed rate account. You can usually get high rates if you keep your account for a period of usually six months to one year, during which time your money accrues in interest.