How To Choose A High Interest Savings Account

Choosing a high interest savings account to house our savings should be quite straight forward. Unfortunately however it isn’t as simple as one would lead you to believe. To hunt down the best deal and ensure your money has the best possible rate/chance to grow, you need to be aware of a few things.

Here is how to select the best high interest savings account for your needs.

 

Beware of headline interest rates or introductory rates

Often a high interest savings account will have an introductory or new customer rate. They use this inflated interest rate to lure people in & seem like the best option, though in the fine print explain that the actual rate will revert back to normal in a few months.

Look for an account that has ongoing high interest, a few months of introductory rates will do very little for your savings.

Do you want a high interest account that is integrated to your banking?

If you sign up to a high interest account with your everyday banking provider, odds are the account will be visible in your internet banking. Is this a good thing? For me it wasn’t – having it visible means I can easily take money out of it at the drop of a hat.

Seperating your high interest account means that it is harder to get the money back (not really harder, just takes a few days) and you can also let it grow on auto pilot to slowly but steadily see progress.

Tiered interest rates, understand them

Many high interest accounts now have tiered interest rates and bonus rates. This means that you need to deposit certain amounts in your account before accessing the better rates.

Be sure to check you are able to achieve these bonus rates via deposits before signing up. No point going with a provider who has a high rate that you won’t be able to access due to your own circumstances.

Are your savings safe?

When choosing a high interest account, safety should be a key concern. Safety against getting hacked, safety against all of your money going under with the provider you choose.

Look to go with a bank or credit union that offers the Government guarantee for deposits up to $1 million dollars.