Annual Percentage Yield (APY)
The first thing to consider is the savings account’s APY. An APY is the real rate you will earn on your money in a year if you meet the account qualifications. It takes compounding interest into consideration to give you a better understanding of what your earnings will be. Banks offer different interest rates and APYs, so researching accounts can ensure you’re receiving the best possible return. SouthEast Bank offers a Bonus Rate Savings account1 with a 2.01% APY* on balances up to $10,000. By meeting three simple qualifications, account holders can earn a competitive return on their balances.Restrictions
Many types of savings accounts have restrictions. These can include minimum balance restrictions, withdrawal restrictions and even age restrictions. Minimum balances are the most common. A minimum balance is an amount you must maintain in your account to avoid penalties. If your funds fall below the minimum balance, your bank may charge you a fee, and you will not be eligible to receive the best interest rates. Minimum balances vary depending on the account. Some accounts also have withdrawal limitations, which may cause you to wonder how you’ll access your money. Fortunately, the withdrawal limitations are not doing away with withdrawals entirely. They simply limit the number of withdrawals allowed within specified time frames. Many savings accounts with withdrawal restrictions offer higher interest rates, and if you’re looking for an account that rewards long-term savings, then withdrawal restrictions are less of a concern. Withdrawal restrictions are another great way to incentivize saving.Holiday-Based Savings
Many banks also offer accounts for specific purposes, like holiday savings. You deposit money throughout the year and earn a small percentage yield, then when it’s time, you withdraw your money – often with interest. These accounts don’t do away with withdrawals, but they discourage them by charging fees for withdrawals before the end of the savings term. That’s why they’re great for saving toward a specific event, but not the perfect fit for something time-sensitive like an emergency fund.Fees
As mentioned earlier, banks will levy fees if certain requirements are not met, so it’s important to know how to avoid such fees, as well as how much the fees are. Fortunately, fees are generally easy to avoid, and banks make their account requirements clear so you can stay away from any unnecessary fees. Some accounts incur a service charge for holding your money; however, these charges can usually be avoided by maintaining a minimum balance. So the decision rests with you, do the account benefits outweigh the service charges? It’s an important question to ask.Other Bonuses
To stand out from other savings accounts, many banks offer additional incentives to customers. For example, SouthEast Bank’s Bonus Rate Savings account holders may choose to participate in the bank’s Round Up Savings2 program. Each time you make a qualifying debit transaction, SouthEast Bank will round up to the nearest dollar and transfer the difference from your checking account to your designated savings account. Savings accounts are versatile and accessible, and most importantly, they make saving easy and rewarding. Pay attention to the above factors, and you’ll undoubtedly find the perfect savings account for your needs.Information contained in this blog is for educational and informational purposes only. Nothing contained in this blog should be construed as financial, legal or tax advice. An attorney, financial advisor, and/or tax advisor should be consulted for advice based on your circumstances.
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