Savings Accounts Basics

Put your money to work for you by learning about savings accounts basics
By Angela Roe, Freelance Writer Learn how you can make your money work for you by educating yourself on savings accounts basics. Savings accounts are specialized banking accounts in which you hold the money you don't plan on spending immediately. The money you need to keep your business up and running should be kept in a checking account. The savings account is the place to grow your money and to hold reserves for unforeseeable circumstances.
 

Start your savings account small, particularly if you have no savings to date. Place a percentage of your income into savings every month. Pay yourself first by doing this before you pay any other bills. Whenever you come into any extra income, place the same percentage of that money directly into savings. You'll be surprised to see how quickly that money grows.

1. Learn what to expect from your savings accounts.

2. Understand the jargon that goes with bank savings accounts.

3. Compare savings account rates offered by various institutes.

Educate yourself on business savings accounts

Bone up on the benefits of opening a savings account. In order to determine which account is best for your professional financial needs, you need to understand the reason for opening such an account.
Try: FinancialPlanningGuide.org explains the importance of savings accounts and walks you through the benefits of such accounts. FinancialPlanningAdvices.com provides an overview of high interest savings accounts.

Know the jargon before you apply for a savings account

Speak the banking language before you navigate this foreign land. As with any business, the banking industry has its own jargon, and by better understanding those terms, you'll be better able to choose a savings account that puts your money to work for you. Learn that APR is the annual percentage rate, for example, or find the meaning of obscure terms such as "accord and satisfaction," which simply means "paid in full."
Try: Check out e-wisdom.com for an explanation of terms for savings accounts so you can better understand what you're comparing when searching for a savings account. AllBusiness.com hosts a banking terminology guide that allows you to look up the terms you need more information on.

Compare savings accounts interest rates before you open a bank savings account

Examine the interest rate and the terms of each savings account before you make any decisions. Determine if online banking is an option for you or if you need a brick and mortar building in order to have immediate access to your funds. Also look for how frequently your interest rate is compounded. Most are compounded annually, but a semi-annual or a quarterly compounded interest rate will yield higher returns on your money. Look for high-yield interest rates, which is the bank paying you to keep your money there. But be aware that most such accounts require a minimum balance and various regulations regarding how often and in what way the account is accessed.
Try: SavingsAccounts.com posts the interest rates that several of the more well-known financial institutes offer for savings accounts so you can make an informed decision. It also has a featured institute worth checking into. Bankrate allows you to compare various savings account interest rates from multiple financial institutions.

• Talk to several business bankers to discover how to become a preferred customer of the bank. Most banks offer a higher savings account rate of interest for such preferred customers.