Savings Account Mistakes to Avoid

Savings Account One of the most common financial products Americans have. We all know that we should put money aside for the future, and a savings account is often the go-to way to do that. In fact, it’s such a regular part of our financial lives that many of us don’t give it a second thought once we open it.

But not all savings accounts are created equal. They are not just a place to park your money. They can help you too Raise that money fast – If you know what to look for. To help you maximize your earnings, we’ve compiled some of the most common mistakes people make when it comes to savings accounts so you can avoid them.

Check out today’s top savings account offers here to see how much more you can earn.

Savings Account Mistakes to Avoid

Don’t fall into this common savings account trap.

Keep your money in a low-interest account

Arguably the top savings account mistake is to stick your money in an account with a low interest rate.

All savings accounts earn interest, but some earn it at a higher rate than others. One if you don’t keep your money High Yield Savings Accountyou missing on potential earnings.

Consider that the average interest rate for a regular savings account is currently 0.40%, according to FDIC. In comparison, rates for the top high-yield savings accounts range from about 4.00% to 4.85%. Here’s what it means for you:

Let’s say you have $1,000 to deposit. If you put it in a regular savings account at 0.40%, you’ll only earn $4 after 12 months. At 4.85% in a high-yield savings account, however, your $1,000 would earn $48.49 over the same period. And since interest is compounded, the difference in earnings increases the more you deposit and the longer you keep the account.

How much more interest could you be earning? Find out by looking at current rates now.

Don’t shop around for the best offers

High-yield accounts are the best way to earn the most interest on your savings, but rates vary from bank to bank and account to account. If you only look at what your current bank offers, you may be stuck with a much lower rate than you can find elsewhere.

Take time to do your research and compare Today’s best high-yield savings account To find the one that gives you the most bang for your buck. You have plenty of options to choose from, so don’t settle for the first one that catches your eye.

Considering only the interest rate

Getting the best interest rate is important, but it shouldn’t be your only consideration when choosing an account. If an account comes with high fees or doesn’t offer the features you need, it may not be right for you.

When evaluating your options, look at everything from maintenance fees to the size of the bank’s ATM network to withdrawal limits (if it’s a Online Bank) You want to strike a balance between the features you need, the interest you can earn, and the potential to reduce any fees on that interest.

Find the best savings account for you by comparing today’s top offers.

Bottom line

There’s another mistake to watch out for when it comes to saving: not setting (or sticking to) your goals. without a Clear savings goals Remember, knowing how much you should set aside each month can be difficult. And once you set that goal, you should avoid some common mistakes to ensure you achieve it.

Automate your savings and make it easy to meet. For example, you can set up direct deposit for your paycheck so that a portion goes into your savings account each pay period. This eliminates the possibility of forgetting to contribute to your savings (or that you want to spend the money elsewhere).

Then, resist the urge to tap into that money for unnecessary expenses. If you’re always withdrawing money from your savings account, you’re not making the most of its benefits. It’s important to exercise self-control and remind yourself why you’re saving in the first place, no matter what An emergency fund or a major expense such as a vacation. Your future self will thank you.