A savings account is one of the simplest financial products to build an emergency fund. With the right rates, a high yield savings account is a secure account to save you money.
It’s not best to save through your normal transactional account (savings or cheque). Interest rates you earn in these accounts are very low.
You’ll want to do your research and make sure that you find high-yield savings accounts to earn the best bank interest.
Questions to ask before opening a savings account:
What is the purpose of opening a savings account?
What types of savings accounts are available to me?
What’s the best type of savings account to open?
What are the fees and minimum balances required for a savings account?
You need to be clear about how you will be using your savings account and how often you’ll need access to your cash.
Accessibility is a key feature to consider when it comes to opening a savings account.
High-yield savings accounts have tighter restrictions on how you can access your funds. So you may need to provide the bank with notice when you need access to your funds.
Interest on savings accounts differs from institution to institution, so you’ll need to take your time when making comparisons.
In South Africa, the most you are likely to earn in interest on savings accounts is about 7 percent.
One of the reasons that people often choose high interest savings accounts is that they can earn interest, while also giving people the option of being able to withdraw the funds very easily.
This type of account is also an ideal place to store money that you don’t want to spend on monthly expenses, but that you may wish to use in the near future.