Considerations When Comparing Savings Accounts

by CB on October 19, 2012

compare savings accountsSaving money is obviously what the world needs, but very seldom what we make a priority in our lives.

Yet, those who do save, or make the best effort to do so, often end up with a stable financial footing to begin to enjoy the rest of their lives.

So why is it that most people would rather spend than save?

Could be part of some cosmic plan that allows those who do save to be in a better place than those who don’t later in their lives? :)

It’s simply mathematics: if you take the time to save early on and invest your money, you’ll be better off down the road.

Comparing Savings Accounts

With that in mind, let’s do a fixed rate savings comparison. Savings accounts are good to have, but since the change in the economy within the past 5 years or so, your return on interest is much lower than it used to be. So how can you find high interest anymore?  In many cases, the best way to find a savings account with the most yield would be to open an account through an online bank.  Just like buying car insurance online, online banks can have as much as a 20% better return-yield over traditional brick and mortar bank.

Considering Fixed Rate Bonds

Along with online savings accounts, some investors consider fixed rate bonds for their portfolios. Fixed rate bonds do not fluctuate with their rate like most saving accounts.  With some of the highest rates of saving available, fixed rate bonds can be very appealing, but more research is recommended before any rational decision made on the best way to go for savings. For instance, you can open as many fixed rate bonds as you’d like within a year, but usually the deposit amounts for these fixed rate bonds can be very high and out of reach of many of the working-class public.

Also, rates are locked in preventing one of attempting to change due to the current rate being higher than normal and more of a return-yield for its bond owner. But, to counter this possibility the fixed rates of the bond could also be beneficial to the bond’s owner as it locks in a rate that cannot be changed during it’s duration. Most fixed rate bonds with higher yield are the ones having a longer duration, which would limit one’s access to money deposited for the long haul.

What’s Your Priorities for Savings?

With the savings options listed mentioned and also compared for their strengths and weaknesses, the ultimate choice of course rests with your priorities for the future, and your dedication to the most important part of this article and that is to save. You may want to consider sites like BM Savings for additional comparison needs. Whether you’re saving a little or a lot, a consistent plan can provide quite a hefty nest-egg in the future, and the savings option you choose can determine how much you get back for your return when it’s time to retire!

 

Related Posts with Thumbnails

Leave a Comment