Promotional interest rate on the savings account – how to use it?
Every now and then banks tempt us with exceptionally attractive interest rates on savings accounts. However, this type of promotion should be far-sighted. The offer, which looks very tempting today, may turn out to be average after a few months.
Read the offer carefully
Promotional interest rate – the interest rate is the most important thing we pay attention to when choosing a savings account. When opening an account we usually choose the one with the highest interest rate. We don’t remember that this is a variable that is worth monitoring, and an attractive promotion may be accompanied by additional costs. We should always go a few steps further and carefully study the offer we are interested in, comparing it with the offers of other banks.
Before we sign an agreement to open a savings account, we must carefully Read the terms and conditions of the promotion we intend to use. Unfortunately, banks very often charge a very high interest rate on the account with little obvious additional fees. Typical when using the promotion is the necessity to link the savings account with a bank account. Sometimes it turns out to be useful and even free. In many cases, however, the bank charges monthly fees for maintaining the account or releases it only on condition of making a certain minimum number of withdrawals.
Often, additional fees are also associated with the possibility of making transfers from your savings account. In Simple terms, we usually cannot withdraw or transfer funds without paying any fees. Some banks only allow you to make transfers free of charge (in this case, an account opened specifically for your savings account is useful). External transfers are already paid for, and sometimes only one transfer of this type per month is free.
The more money, the less benefit
In the case of savings accounts, The best promotions usually relate to amounts closing in the amount of a dozen or several dozen thousand dolars. Larger money is no longer covered by attractive interest rates. It’s worth remembering this when reconsidering offers. It’s very possible that the most profitable move with large savings will be to open several savings accounts with an attractive interest rate.
There is another argument in favour of such a solution. Promotions on savings accounts very often also apply to new funds, so a higher interest rate is only charged if a new payment appears on the account. Having several accounts, we can keep track of various promotions and transfer savings from account to account depending on your needs and the best offer. Then the same money will be our “new deposit”, only to be transferred from another savings account.
How do I find the right savings account?
Before you put your money into a savings account, it is worth giving yourself time to observe. It will also be useful to select a bank (or banks) for this circumstance to have all kinds of objective rankings of savings accounts. Such market research will allow us to discover which banks regularly provide high interest rates and which offers are worth using on an ad hoc basis.
Of course, if we have a small amount at our disposal, it is best to decide on the most transparent offer without any tricks, with a Relatively favourable interest rate and use the promotion when we intend to deposit new funds into the account.