How can you maximise your savings account interest rates?
As you go through life, saving money becomes more and more important. Whether saving for emergencies, a new car, a trip to your favorite destination, or a down payment on a home, having a clear savings plan is important. And what better way to keep your funds safe than in a savings account?
You can deposit, withdraw, and transfer funds and avail of other banking services, all while earning interest on the balance. However, most people do not know they can maximize their savings account interest rates with simple yet smart strategies.
From choosing the right savings account to understanding the interest calculation, let’s explore useful tips to help you get more out of your savings account.
1. Find a bank with higher interest rates
Compare savings account interest rates of different banks to find the best deal. Even a small difference in interest rates can boost your earnings, so it pays to do your research. Use a savings account calculator to calculate the interest you can earn based on your total account balance and the current interest rate you are being offered.
Although interest rates are important, they should not be the only factor to base your decision on. You should also consider the bank’s reputation, offers, maintenance fees, 24/7 online banking, mobile banking, ATM facilities, and customer service.
2. Go for exclusive savings accounts
Banks and financial institutions offer different savings accounts for youth, women, children, and senior citizens today. Most of these accounts offer higher interest rates and exclusive offers compared to a standard savings account.
For example, a senior citizen savings account usually comes with high-interest rates and other benefits such as free debit cards, insurance benefits, and higher fixed deposit rates. Similarly, women’s savings accounts offer exclusive women-oriented benefits to promote financial independence.
You can compare these accounts’ savings account interest rates online and choose the right one to maximize your interest earnings and enjoy value-added benefits.
3. Indirect earnings through interests
When you keep a sufficient balance in your savings account, you can earn more interest and use it to make investments.
For example, assume you have Rs. 7 lakhs in your online savings account and earn a 3% interest. Based on these inputs, a savings account calculator will display a stake of around Rs 21,000. And if your bank offers a higher interest rate, this amount can go even higher. This extra money can be reinvested into a systematic investment plan (SIP), bringing you more earnings.
4. Use sweep-out and sweep-in facilities
These facilities enable banks to automatically transfer money from your savings account into a fixed deposit account. Thus, idle funds don’t remain idle and can earn higher interest. And, in case of an emergency, you can swipe the funds back into your savings account. However, not all banks offer this facility, so you should research and open a savings account with the one that does. This way, you can earn interest on your idle funds, save smarter, and keep your funds accessible when needed.
Maximizing your savings account interest rates is all about making smart financial decisions. So, compare different banks and their savings accounts, check the account’s minimum balance and fees, and take advantage of promotional offers to earn more on your savings and grow your wealth. Remember, the key is patience, discipline, and a smart plan.