What you should know about savings accounts

Are you living pay check to pay check?

Are there things you want in life, but don't have the money for?

Are you dreaming about getting some savings behind you but don't know how or where to start? Well let us make it really easy for you.

Here's some solid gold info on where to start when it comes to opening a savings account...

Savings accounts were developed so that you can earn higher interest amounts on your deposits than you can with normal transactional accounts. So the bank or financial institution you put your savings into will actually be paying you money! Access to your funds in a savings account is also typically a little trickier, so that you can't go pick-pocketing your savings whenever you like!

In this day and age, consumers are lucky enough to have more than a few options up our sleeve. In fact, when it comes to savings accounts there are quite a few! That's why we've searched high and low to track down some of the best savings accounts on offer. You can check them out 'here'.

But before you just go for the account that's going to earn you the highest interest, there are a few other things you should know...

Interest earned can be calculated either daily, monthly, quarterly, half-yearly or annually. Exactly when this interest earned is then credited to your account is another issue. It can be credited on a daily basis through to a yearly basis. Both of these processes are important factors in determining how your savings' interest grows, or 'compounds' over time.

The trick is that the more often interest is being calculated and credited, the more interest you will earn. For example, $5,000 invested for five years with interest calculated daily then credited monthly will earn significantly more interest than if interest were calculated quarterly and credited annually. See the 'Interest Calc/Daily' column in the table to see how often each different product listed calculates their interest.

The next thing to consider is accessibility. Whilst online savings accounts may offer high interest rates, they may not provide you with the same access options that a more traditional savings account would.

For the determined saver, the access issue probably isn't a problem as these accounts can help you keep away from spur of the moment purchases. However if you require immediate access to your funds, a day to day account with an attached sub-account is probably a better idea.

At the end of the day, it is you who needs to weigh up your preference for greater access as opposed to gaining more interest (and therefore money).

Another thing to understand is the difference between fixed term and on call savings accounts. While you are still beginning your savings journey, fixed term accounts might not be of much help, but they might be useful once you have accumulated a decent amount of money in your savings account.

Fixed term accounts are for the convenience of putting away a certain amount of money at a fixed interest rate for a fixed amount of time and watching your savings gather interest. When you have a larger amount of money this can be a good way to gather interest without letting the regular rise and fall of interest rates affect your savings.

However, these days the interest returns for online savings accounts can be just as good, if not better than fixed interest investments. These new accounts offer higher interest rates than traditional branch-based accounts and lower fees because they are based online.

So while we may have had to learn the hard way through the dives and turns of the financial world of late, we have all come to realise one thing: we can't rely on credit alone to pursue our dreams.

We need the real stuff, the hard earned cash stocked away, ready to use when we accumulate enough for our goal. There really isn't a better feeling than watching all of that money pile up.

So get saving today!

And don't forget, if you need a bit of quick cash to tide you over until next payday, we've got you covered. Get a Cash Doctors short term payday loan within just an hour of applying and have it all paid back within a matter of weeks.

Get all the info you need right here.

Cash Doctors Articles