What should I look for in an online savings account?
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What should I look for in an online savings account?

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Having a savings account is an important part of being a responsible adult. A savings account is a great place to keep money aside for planned expenses like holidays or renovations. But it’s also a place to store your emergency funds – money you’d use if your car unexpectedly needed repairs, or you had to weather months without a job.
When all is said and done, not all savings accounts are created equal.

Savings weighed up against house costs.

Savings accounts have positives and negatives that can determine if they’re right for you. Features such as the online security offered by institutions, account conditions such as the minimum or maximum opening balance, and simply the account interface online can make a big difference to the overall experience of having and using a savings account.
There are a variety of different savings accounts out there, so comparing savings accounts and choosing the right one for you and your goals can seem overwhelming. While there’s no one-size-fits-all account to suit every need, if you consider the following important features, your choice may become a little easier.
Here are six features to look for when you’re searching for the best possible savings account:

Interest rates

Many people think the interest rate is the be all and end all of savings accounts, but there are other features worth paying attention to. Yes, interest rates are important, but they also come with all sorts of conditions that can make the savings account seem less attractive.
Savings accounts are no longer the place for stashing money if you want it to watch it grow, unless you’re looking at premium savings accounts with higher interest rates. In many cases, a savings account is a safe place to keep money that you might need to access quickly for an emergency, or squirrel away for future travel or purchases. A lot of banks advertise a high rate that soon reverts to a low rate, and is conditional on how much money you’re banking. Be sure to read the fine print. How much you deposit and withdraw can also affect your rate. Try your luck with a bank who calculates interest daily and pays it out monthly, like Rabobank.

As few fees as possible

When you deal with banks, you’re going to have to deal with all kinds of fees: service fees, monthly fees, ATM fees, overdraft fees, and many more.
Funny that with such low interest rates, many savings accounts still come with fees. Sometimes they’re avoidable, but you often have to keep a certain balance to avoid paying them. For example, a bank might charge $5 per month if you don’t keep at least $300 in your savings account. Even if you're a great saver, do you want to take a chance on getting hit with a penalty if you dip a little low? Some possible types of fees that you can expect to pay on various savings accounts include:

  • Monthly account fees
  • Branch deposit fees
  • Over-the-counter transaction fees
  • ATM withdrawal fees
  • EFTPOS fees
  • Electronic transaction fees
Fees might seem inescapable, but some banks want to remain competitive and offer zero fees. Before you sign up, make sure you understand what kinds of fees you’ll be looking at over time.
As a consumer, the choice is yours. If you don’t like how much your bank is charging you in fees, it’s really easy to switch over to a bank that really wants to help you save.

No minimum opening deposit

Some banks make you deposit a certain amount of money into your savings account when you open it, say around $25. If you can't meet this requirement, your application can be denied, but the bank can also recommend a different account that suits your finances – if they want your business!

Man putting money in a piggy bank.

If you want more freedom to start your savings account with an even lower amount, you’ll have to search for accounts that don’t require any minimum opening deposit. There are some out there, particularly online-only banks like Rabobank. Our NoticeSaver has a $1 minimum opening deposit. Rabosaver has no minimum deposit at all.

Automatic transfers

We all know that saving money isn't easy, otherwise we’d all be better at it. A good savings account lets you automate regular deposits making it far more likely to save money each month.
Look for a bank that offers automatic transfers from your checking to your savings account – then set up monthly or fortnightly payments. Be sure to check that fine print so you’re not paying any extra fees for this service. With Rabobank, you can add to your savings whenever you like, via free online bank transfers.
You don’t have to go overboard with the transfer amount too. Even setting up an automatic transfer of just $50 per month into your savings, you'll save $600 at the end of the year. Do the math and you’ll see how that adds up over time.

Withdrawing your savings

It can be tempting to dip into your savings, especially when it’s easy to transfer money between your accounts at the tap of a screen. Luckily there are usually rules in place when it comes to savings accounts. For instance, some online savings accounts require around 60 days notice each time you want to make a withdrawal. It might sound annoying not being able to access your money straight away, but this restriction helps you establish healthy savings habits. When you know you’ve got a long notice period, you might lose the temptation to withdraw those dollars.

Watch your money grow.

Of course, good banks understand that life happens. With Rabobank, if you find yourself in a financial pickle, you can apply for the early release of your funds by providing evidence of the hardship.
Rabobank have other saving account options where you can access the funds immediately, PremiumSaver and Rabosaver. Savings accounts like these are a great option if you think you might need to access your savings for unexpected financial emergencies. While it’s great to have access to your sweet savings, it’s a slippery slope. Be careful not to use your savings account as if it's a checking account. And keep in mind that some savings accounts only let you withdraw a certain amount of times over the year before charging you. Needless to say, do your research before you sign up.

Saving incentives

Some of us need an incentive to save which is why a few online banks now offer premium rates of interest for customers who actively increase their savings balance per month. For instance, our PremiumSaver gives our customers better interest if they increase their balance by $50 per month. Not a bad idea to make people want to save more! But that’s just only one kind of incentive.
Personal financial management tools such as calculators are an added bonus when you’re drawing up your budget, setting your savings goals, and tracking your progress.
Nowadays, banking is about convenience as much as it is about generating interest income, and so it's important to have a banking relationship that lets you do business the way you want. Some banks pay bonuses when you open multiple accounts, either through cash payments or by offering better interest rates. Sometimes opening a savings account can open the door to better terms on loans, investments, and other financial products. So, make sure you choose the right one that will help you reach your financial goals.

Investing in the greater good

Oftentimes we don’t think about what our money is doing sitting there in that savings account. Do you know what your bank does with your hard earned money? We do! Here’s how it works: when you put your money into a savings account, it earns interest.

New Zealand sheep in a field.

Interest is money your bank pays you so they can use your money to fund loans for other people. This is how banks make money – by lending money! At Rabobank, we try to use your money in the best way possible. Rabobank puts your deposits back into the country by supporting New Zealand farmers and growers. As well as giving you competitive rates and secure banking, you grow your savings, and grow our country at the same time.
Keen to open an account with Rabobank? Start your application today!

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