When you are choosing which bank to start a savings account with, how their savings rates compare with one another is one of several factors to consider. Interest rates for most savings accounts are not that great. The average account will barely grow from one month to the next. Dig deeper and you learn how to make your money grow.
The way savings rates compare is insignificant if you are only managing to make pennies yearly on every dollar. This is the result when you are constantly taking money out. Your best bet might be to use a checking account for regular withdrawals and reserve your savings account for just that: saving. Little by little you will see the value rise, though slightly.
Besides the ways in which savings rates compare, consider also the way fees compare from bank to bank (or from one financial institution to another). Many charge high fees to maintain your account. You might discover that their interest rates, while higher than elsewhere, will not make up for the amount you lose in bank fees annually. Not every institution charges fees, but they will have to make their money somewhere. Find out what that will mean to your pocket book.
It is typical for there to be conditions attached to an account. For instance, you must start with a minimum balance. If you want the highest rate of return, you need to keep at least this or that amount in the account at all times. Some consumers can never maintain an account balance at or above the minimum.
If you can, however, this is the way to earn higher interest.
The long term variety is ideal for families who want to save for their kids’ educations or are working towards an expensive event some years in the future. Short term savings plans are ideal when something such as a wedding or a holiday is coming in a year and you want to be ready for it.
Savings rates compare favorably for the consumer who wants to open a trust fund. These cannot be touched for several years, so they have time to grow and are very safe. Most banks will offer a good rate for these. Your savings is their investment capital, so it is in their interests to give you an incentive to save with them and not with some other bank.