Savings accounts offer you the potential to maximize the returns on your funds and provide a safe place for them. But just placing it into an account won’t do; to maximize profits on it you need to follow certain strategies.
While choosing an account with high yield savings rates can help increase profits, there are also other methods you can employ to do just that. Below we outline seven tips which may assist in unlocking all the potential of your money and help increase returns. So keep reading to discover ways that could maximize its usage!
- Set Clear Savings Goals
How you intend to spend your saved money can reveal much about its profitability and potential returns. Because individuals have different needs, determining your goal(s) first before proceeding further will help maximize profit on that money. Ask yourself some pertinent questions such as if this savings goal will lead to anything tangible in the short term or is simply for long-term fulfillment.
Long-term goals could range from setting aside emergency savings, saving for your child’s college expenses or retirement saving, etc. Once your goals have been established it’s important to set yourself on a course towards achievement; to do this, tell yourself you will save a specific sum by the end of this or next year – this way success won’t elude you.
- Automate Your Savings
Instead of setting aside money each month in your savings account manually, consider automating it instead. By setting up your current or salaried account such that a fixed sum will automatically transfer over, each month on an agreed upon date your savings account should grow faster and grow deeper than ever!
Automating transfers weekly or monthly ensures a portion of your salary or revenue will go directly into savings without risk of spending it all too quickly.
First and foremost, this approach reduces manual transfers, making saving easier while simultaneously eliminating temptations to spend your money unwisely. This approach will prevent you from impulse purchasing, which is one of the main reasons you might not be able to save much.
- Opt for High-Interest Savings Accounts
Savings accounts fall into different categories, and all of these categories offer different interest rates on your money. Fixed deposit accounts often offer a high yield on your savings compared to other accounts. This allows you to capitalize more on your money.
Finding an account offering high returns requires some investigation of banking institutions nearby. You could visit local banks or visit bank websites in search of those offering more interest for your savings account money.
If you want to ask for expert advice, we will recommend you go with online financial institutions. These institutions provide higher interest rates because of their lower overhead costs and can be at your best advantage. You can also find some of the best high-yield savings accounts on Joywallet with minimum to no additional fees and the best interest rates in the States.
- Avoid Unnecessary Fees
Some savings accounts have so many additional fees that they can wear away your savings. This type of fee includes ATM, maintenance, and any other additional fee related to cash transactions. So, before you accept the terms and conditions, understand all of these additional fees.
Moreover, there are some minimum balance requirements for some savings accounts. Based on these requirements, you will have to maintain a minimum balance in your account to avoid all these unnecessary fees.
This is an easy way to avoid additional charges, but this way, a certain amount of your money will be bound in the bank. So, research other options and make an informed decision that is in the best of your interests.
- Take Advantage of Rewards Programs
Many banks and credit unions offer rewards programs that provide you with the advantage of increasing your savings. Based on these programs, you will get cash bonuses for reaching certain limits or even opening your account in the bank.
Consider taking advantage of banks that provide reward points or cashback rewards to put money away without exerting extra efforts to save. Take advantage of such programs to bolster savings without exerting further efforts!
However, to take full advantage of any bonuses from banks you must thoroughly read their terms and conditions as there may be restrictions associated with such offers. This will allow you to make an informed decision about achieving your financial goals.
- Separate Short-Term and Long-Term Savings
If your goals span both short- and long-term horizons, it would be prudent to divide up your savings into two types of accounts – one dedicated for short-term goals and the other dedicated to longer-term ones.
Short-term savings accounts will let you access your savings more often so you can make the necessary purchases. This type of account is good if you want to save money for a vacation or buy a vehicle.
Longer-term savings accounts offer higher interest rates and allow you to optimize your investments more. These accounts are especially beneficial if you want to buy a house or save for your child’s educational future.
By setting up separate accounts for these different needs, it ensures you can access certain funds at any given time while capitalizing on another portion.
- Resist the Temptation to Dip into Your Savings
While saving your money in a savings account is beneficial, you might be tempted to spend it on unnecessary things. The term used for such purchases is “impulsive buying,” and it drains your savings without adding any real value to your life.
You can also consider setting up different savings accounts for different financial goals. For example, it is advised to build an emergency fund for financial setbacks and another account for long-term savings goals like your child’s future education.