By Anthony Bell, Finance Expertwww.bellpartners.com
When looking at savings accounts, the three things that need to be considered are:
- Interest rate paid
- Fees charged
- Accessibility of the funds
Getting higher interest rates used to lock consumers in to having to take out term deposits. Over the last 10 years there’s been strong growth in the number of high interest accounts available from most financial institutions.
Most of the banks have higher interest accounts that can be linked to your day-to-day transactional accounts. There are also other institutions such as ING Direct who specialise in higher interest accounts that are linked to your normal bank account, even if it is with another institution.
To compare rates, www.cannex.com.au lists the current rates available across a broad range of institutions.
Check the fees that apply to any account you open. A high interest rate can be eaten away if the fees charged are excessive.
With any funds you are saving, consider how quickly you may need access to the funds. Some can give you instant access to the funds, whilst others can require 24 business hours before the funds are available. Some higher interest accounts will also allow your pay or other income to be deposited directly, and some will require funds to be transferred via your regular bank account.
Whether or not a high interest account is the best place for your funds is going to depend on when you will need the money, and how important the higher interest is going to be in helping you save your money. For example, if it is long term savings you are after, you may consider other investment alternatives that could generate higher returns, albeit at higher risk, such as share funds. For shorter term savings, a bank account is likely to be better as you want greater certainty without taking any risks.
If you are looking to invest for the longer term, consider seeing a financial advisor to explore the broader range of investment products that are available that might be able to better assist you reach your personal financial objectives.
