Summarize and humanize this content to 2000 words in 6 paragraphs in English Choosing the right bank to open a savings account might seem simple, but the wrong choice can cost consumers money. Many consumers overlook important account features that could help their savings grow or stay with the same bank despite higher fees and minimum withdrawals because the bank is familiar. For You: 25 Creative Ways To Save Money Try This: 8 Common Mistakes Retirees Make With Their Social Security Checks However, there are smart money moves consumers can make to help make their savings work for them. Here are five costly mistakes to avoid when choosing the right bank for your savings account. Many individuals park their savings in a traditional bank savings account and settle for minimal interest rates. According to a recent Vanguard survey, 54% of Americans save in traditional bank savings accounts — and 39% in checking accounts — where the average interest rates are roughly 0.41%. “Keeping your hard-earned savings in a low-yielding account could mean leaving significant interest earnings on the table,” said Tiana Patillo, CFP, financial advisor manager at Vanguard. “Make sure that the account you’re considering offers a competitive yield.” The Vanguard survey also found that 60% of Americans didn’t completely understand how interest rates impact their savings, and 57% reported that their savings are earning less than 3% interest. “The yield, or annual [percentage] yield (APY), of a particular account tells you how much interest or return you can expect to earn on your savings over a year,” Patillo said. “Saving in an account with a higher yield can help you reach your goals faster, and that probably means considering options outside of your [current] bank.” Consider This: I’m a Bank Teller: 4 Reasons You Should Withdraw Your Savings Right Now Savings accounts aren’t set in stone. Shopping around for the right savings account could help consumers maximize their purchasing power. “With the Federal Reserve’s periodic revision of the Fed Funds rate, you’ll notice that banks often reciprocate by adjusting their savings accounts interest rates,” said Gary Zimmerman, founder and CEO at MaxMyInterest, a platform for earning higher yields on FDIC-insured cash. Zimmerman explained, “However, not all banks do this simultaneously or by similar margins. As banks continually change their rates, rate comparison platforms can help you identify the top rates. Many banks are paying an interest rate that’s less than the inflation rate, which means you’re actually losing reach purchasing power every day.” Choosing a non-insured bank or fintech platform could put a consumer’s money at risk in the event of a bank failure. Banks with NCUA or FDIC insurance cover up to $250,000 per depositor. “Putting your money into a bank that isn’t protected by one of these insurance programs means your money won’t be protected should that institution fail,” said Susan Espinosa at Skyla Credit Union. “Some credit institutions, including Skyla Credit Union, provide additional deposit insurance above NCUA protections, offering members up to $500,000 insurance per person.” Monthly maintenance fees, minimum balance requirements or transfer limits can quietly drain savings account balances if consumers aren’t paying attention. “When comparing savings accounts, read the fine print when it comes to monthly fees and minimum balances,” said Erika Kullberg, a personal finance expert. “Unexpected fees can quickly wipe out your interest earned. Compare terms and conditions, as well as interest rates.” Kullberg said consumers should consider savings accounts with low or no fees and low or no minimum balance requirements. “If the interest rate and terms are right, I would prioritize accounts with mobile banking features and those that will link to any budgeting or money management apps you use,” Kullberg said. Some savings accounts limit how often consumers can withdraw money or charge for excessive transfers, which can be costly for those who need quick access in an emergency. “Make sure you can easily access your savings in times of urgency by linking your savings to your checking,” said Andrea Woroch, a consumer finance and savings expert. “You should also look into maximum withdrawal limits in the event you plan to access your cash more frequently.” In addition, transfer speed and the ease by which consumers can access their money matters. “If your account is with a different bank, make sure you can move your funds quickly and easily between banks,” said Hillary Seiler, a personal finance expert and CEO of Financial Footwork. “Look for same-day or next-day transfer options. A reliable online platform and a user-friendly app are a must if you want to manage everything seamlessly.” More From GOBankingRates This article originally appeared on GOBankingRates.com: 5 Costly Mistakes To Avoid When Choosing the Right Bank for Your Savings Account
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