5 Key Factors to Look for in a Bank Before you Open a Savings Account

Posted by John Judge on February 19th, 2019

Saving accounts are essential and necessary for many reasons. These accounts, undoubtedly, are the most conservative investment options, and nowadays, banks package these with many benefits and offers.

But before you decide the savings account to be opened, there are few things to be considered

1. Interest Rate

Interest rates are the first thing that crosses our minds when talking savings account. It is upon the discretion of the bank to offer interest rates, whether low or high. While most banks offer 4% interest on your account balance, some go up to 6.75% and beyond too. In fact, a few have different slabs of interest according to your balance. Choose a savings account with high interest rate to earn more.

2. Minimum Balance

Another question to ask a bank, before you get your account opened is if it is a zero-balance account or a certain minimum balance must be maintained. Banks that require you to keep a minimum balance charge a fine if your balance falls below the minimum limit. In case you’re sure of retaining the minimum limit, you have nothing to worry about. If not, it is advisable to look for a bank with zero- balance or low minimum balance limits.

3. ATM and Branch Density

Most banks allow you to withdraw cash for free from their own ATM networks and other bank ATMs for a certain number of times a month. Usually, you can withdraw approximately five times from your own bank ATMs and about five times from other bank ATMs for free. However, some banks who don't have an extensive network of ATMs offer more (10 or even 15) transactions at other bank ATMs in a month for free. Thus, make sure either the bank you choose has a vast network of its own ATMs or offers higher limit to the number of free transactions from other banks ATMs.

As for the number of branches is concerned, while it used to be a vital consideration a few years ago, now with the internet and phone banking offered by most banks, this is not a deal breaker anymore.

4. Online and Mobile Access- Ease of Internet Banking

As mentioned above, online banking has tremendous benefits. You can finish all your bank and account related work, right on your phone’s app or the bank’s website. Thus, checking for the bank’s online presence and internet banking features can play an important role when you open an account.

5. Transactions and Service Charges

Many banks charge you for the services offered like SMS, chequebooks, number of transactions, annual charges for debit cards, etc. It is better to read the fine print and be aware of these charges before you open a savings account.

Doing thorough research and then selecting the right bank can prove beneficial in many ways. This will not only help you save and lessen the hassle of money transactions but will also offer additional benefits to better your experience.