One of the first steps to building wealth is to start a savings account. You may be familiar with the phrases, "Save for a rainy day" or "Emergency fund". And it's true that it is very important to have a reserve of cash that is readily available in case of unforeseen circumstances.
It's also important to have a reserve of cash that can be used towards fun activities. If you're like me, I am way more motivated to save if I know that a portion of it is going towards a vacation, a spa date or a new pair of Tieks.
For many of us, saving is a challenge. We know we should do it, but it feels like a chore with very little pay off. Saving with the idea that a portion of it will be used for a vacation or something fun, will motivate you to stash some cash aside.
If you haven't started saving, today is the perfect day to start. And if you are an entrepreneur, consider having a personal savings account and a business savings account.
In today's financial market, opening a savings account is a much simpler process. You don't even have to stop into a physical bank anymore. Yay!
Below are three savings accounts that I totally dig.
Ally Savings Bank
Ally is the bank I use for my savings. I set it all up online. It has an app for the iPhone and Droid, which allows me to transfer money and check my balance from my phone.
Their customer service is top-notch and it regularly has the highest interest rate for its savings account. At the time of this post, it is at 1.00%. When I opened it, the interest rate was 1.20%.
Although Ally does not have a physical location, you can deposit checks remotely and there are no monthly maintenance fees.
And there is no minimum account balance to maintain.
The downside to using Ally is the time it takes to transfer funds. There have been times when I have had to wait up to five days for my Ally funds to transfer to my checkings account. Which can be problematic. Other than that, I have been very pleased with my experience.
Capital One 360 Savings
Although I have not used their savings account, I do have a credit card through Capital One. I included them on my list because I LOVE their brand. They are passionate about cutting out BS fees and promote compassion & empathy during their customer service.
There are no fees associated with this account and no minimum balance requirements.
At the time of this writing, their interest rate is 0.75%.
They also have a program that allows you to set Savings Goals and track your progress. This is a great way to stay motivated.
You can also set up to 25 different savings accounts for free. This is amazing if you want to have a business savings account, vacation savings account, tax savings account, etc.
The reviews on the Capital 360 account are really favorable. However, the main complaint is that it can take a long time to transfer money from your savings to your checkings account.
Barclays's Dream Account
This account is super cool! Similar to the other two accounts, there is no minimum balance requirement and no monthly maintenance fees.
At the time of this writing, the interest rate is 1.04%.
What makes this account so fabulous is that it gives you a bonus for saving.
- Every time you make consecutive deposits for six months, they give you a 2.5% bonus on the past six months of interest earned. And
- If you make no withdrawals for six consecutive months, you earn another 2.5% bonus on the past six months of interest earned.
The only downside, that I can see and read from the reviews, is that you are limited to depositing up to $1,000 per month into your dream account. And it does not appear to have a mobile app.
Other than that, this is an awesome account to help you develop smart savings habit.
How to choose your savings account
Choosing the best savings account is a personal decision. Before choosing one, be sure to check if they have a minimum account balance requirement and any monthly maintenance fees.
The interest rate is also a consideration, but keep in mind that they do fluctuate and unfortunately, you can not "lock" in a rate.
If you want to review more savings accounts, check out this post from NerdWallet.
Now I'd love to hear from you.
Did this post help you? Which savings account do you use?
Let me know in the comments below.
Cheers to your wealth and wellness,
Danetha Doe (@danethadoe) is a business strategist and was named one of the Top 40 under 40 accounting professionals in 2015 by CPA Practice Advisor. She is the creator of Money & Mimosas, an online educational resource for entrepreneurs.