$avings Account Tingz II

Rep: Thank you for calling XYZ Bank, Jessica Speaking, how may I help you?

Customer: Hi, I’ve been trying to use my card at the store and it keeps saying that I’ve been declined, so what’s the deal?!

Rep: I’d be more than happy to assist you, just give me a moment while I pull up your account… As a matter of fact, I think I already see the issue.

Customer: Okay, so can we make this quick because the cashier is getting very impatient and I am holding up the line.

Rep: Oh, no problem! Right now it looks like you only have a savings account with an ATM Card linked to it. An ATM card can only be used to do transactions at the ATM but cannot be used for Point-of-Sale purchases. If you want an account that offers you a card in which you can make purchases, you’ll need to open a checking account. If the store you’re in has an ATM, you’re more than welcome to withdraw cash and give that to the cashier as payment.

Customer: Well how long does it take to open a checking account? Is that something I can do online?

Rep: Yes ma’am, you can visit our website to open one, I can open one on the phone for you, or you can visit your local branch as well.

Customer: Ok great, I guess I’ll run to this ATM before these people go crazy in here. Thank you for your help and I’ll be sure to open a checking account online as soon as I get home.

Rep: Anytime! Have a great day!

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If you’re planning on doing transactions with a card, it is always best to go with a checking account. Savings accounts can be very limited in terms of the types of transactions you can do with them. These accounts are best utilized when it comes to savings for future needs and letting your money grow. They may not earn you a lot of money, but at least you’ll have the peace of mind of knowing that your funds are federally insured. Be sure to get the most out of your money by being conscious of the fees associated with the account.

What are the common uses for a Savings account?

•           I want to save up to make a big purchase: Have you ever had the dream of buying a car or even a house?! If that thought has ever crossed your mind, be aware that you will most likely need a down payment. Some places will not even approve you for loans like this if you don’t have proof of the down payment funds. A savings account is a great place to store these funds while you’re saving up to make a major purchase.

•           I want to go on a Vacation and save for the holidays!: I guarantee that you’ll enjoy your vacation even more if you have the funds saved up to go or if you didn’t have to put yourself in debt to go. It’s best to put money in your savings account from every paycheck to create a vacation fund. Some FI’s even offer a special product for vacations and holidays where if you take money from the savings account before you’re supposed to, you’ll get charged a penalty. This guarantees that you’ll be less inclined to touch the funds before the right time.

•           I need to save up in case of an Emergency: Adulting 101: Life will always and forever be full of surprises. Instead of putting yourself into debt, why not start up an emergency fund? It’ll be a lot easier and quicker to pull money from your savings account as there is no penalty and you don’t need to wait around to hear about the approval for a loan.

Is it better to have many or just one?

Some people like to have a different savings account assigned to multiple purposes. For example, if you’re saving for Christmas you may want to have a separate savings account to track your progress if there is a goal in mind. That way, you won’t need to depend on credit cards to make your gift purchases.

As I’ve previously stated, be sure to look for a savings account that has no fees associated with it so that you can enjoy the benefit of earning interest.

Some people think that having separate savings accounts can be a little complicated. Don’t discredit online banks as they usually offer higher interest rates and banking apps that are very easy to maneuver.

How do I add money to my account?

The great benefit of having a savings account is that there are so many different ways to add funds to the account.

•     You can deposit cash: The most typical way to deposit cash is to go into your local branch and speak with a teller. Some ATM’s even allow you to make deposits depending on whether or not the ATM at your location can accept cash.

•           You can deposit a check: Why walk around with that check your grandmother gave you for your birthday 5 months ago? When depositing the funds at a financial intuition, be sure to include the account number. A lot of intuitions now offer Mobile Deposit Capture where you can make the deposit with your smartphone so that you don’t have to go anywhere near a branch or ATM. Always be sure to check with your FI’s funds availability policy for timing on check holds.

•           You can do an internal transfer from your checking account: You can instantly move money from your checking to Savings account. You can do a transfer in person, via mobile/online banking, or even calling your FI’s hotline (which I do not recommend unless you have time to wait on hold).

•           You can do an External transfer from a different FI: There is usually a feature in online banking where you can transfer money from one FI to another. It may take a few business days to go through and sometimes there is a fee especially if you need it to be there next day.

•           You can have your paycheck directly deposited: Ask your employer if you can have your paycheck split to have a portion go into your savings and some go into checking. You’ll save without even noticing as the funds never go into your checking account.

Do I have easy access to my money?

In most cases, to use your money from the savings, you will need to transfer the funds to your checking account and pay using your debit card, online bill pay, writing a check, etc. There are a few different ways to access your funds in the savings.

•           You can do an internal transfer from savings to checking: Be sure to be conscious of Reg D as I stated in the previous post. You can transfer money though the app, online banking, customer service, in person, or through your institution’s automated phone system. It’s very quick and easy and is available for use instantly.

•           Electronic Transfer (External bank): You can have funds transferred electronically from one institution to another which may take a few business days. However, you can do a wire transfer as well which may cost you a fee.

•           Request a cashiers check: In situations like making a down payment for a house or car, it may be easiest to have a teller cut you an official check which offers the benefit of guaranteed funds.

Savings Account Alternatives

As previously stated, savings accounts usually offer a very low rate (usually less than 1 percent), so why not take the time to search for higher rates?! To get the highest possible rate, it is best to look into something other than a basic savings account.

•           Online Savings accounts: I know, it sounds a little sketchy, but these accounts are usually insured by the FDIC for up to $250,000 as well. These types of accounts usually offer higher rates and lower fees. There is a big difference in rates because it doesn’t cost as much to run these institutions as they are not brick and mortar. You can usually start an account with an online bank for a minimum deposit less than $5. The accounts that offer a higher yield usually require a much higher minimum deposit. Although these banks are online, they do have ATM machines to withdraw money from with the ATM Card you get as well. You can use the options previously stated above to deposit and withdraw money from your account.

•           Money Market Accounts: These accounts are very similar to savings accounts as they limit your number of withdrawals per month. It’s a lot easier to spend the money as you can write up to 6 checks a month with a Money Market. Be sure to shop around for rates as these accounts typically have a much higher yield.

•    Certificates of Deposit (CD): If you feel that your funds do not need to be liquid for at least 3 months, you may want to put your money into a CD. You can usually pick the time frame in which you’d like you funds to be locked down (Anywhere between 3 and 84 months). Just be careful, as you will have to pay a penalty if you need to break the CD early. There are some CD’s out there that do not have a penalty if you break it early, but those usually come with much lower yields.

Thank you so much for joining me for the second part for savings accounts everyone. I hope you've learned a lot and open a savings account if you don't already have one. Remember to subscribe so you can get notifications every time a new post has been uploaded. If you have any questions always remember to visit the forum and leave it there or email me at shanieceaxtmann@gmail.com.