4 Steps to Capitalize on a Sunny Savings Forecast
The Federal Reserve is expected to continue to raise interest rates in the near future, and that has some important implications for banks, and banking customers.1 Why is that? When the Fed raises rates, it effectively makes it more expensive for banks to borrow money (both from the Fed, and each other). This may also impact you as someone with money in a bank. It's likely that banks will do more to incentivize you to save so that they don’t have to borrow as much from the Fed. Higher interest rates typically motivate banks to carry more liquid capital, so they’re more apt to offer more attractive interest rate options to their customers as a way to build and maintain that working capital. Savings accounts in general are an important tool toward reaching your savings goals.
How Can I Choose the Right Bank? There are a lot of great-sounding offers out there, with more popping up what seems like every day, so it’s little wonder that shopping for the best savings account can be a headache. We know it can be a hassle trying to decipher all of the fine print to make the right decision, so we’ve compiled a quick list of key information to consider when evaluating all your options.
- Interest Rates - This is probably one of the first things you’ll look at when trying to decide where to squirrel away your money, and it makes sense. Who’s going to make it worth your while? So while we agree that it’s a great start to evaluate all your interest rate options, it’s definitely not the only factor to consider.
- 3rd Party Evaluations - Publications like Bankrate and Deposit Accounts are in the business of scoring different banks and credit unions, so it’s a good start if the bank you’re looking at has a positive review, like Dime does with its “Superior” 5-Star Rating on Bankrate and an “A” rating on Deposit Accounts.
- Fine Print - We can’t stress this point enough: It’s crucial to read through all the terms and conditions of any account you’re considering signing up for. You never know what may be tucked away in the tiny print that could make your banking life pretty frustrating. For example, some banks may require a waiting period if you want to make a withdrawal, or require a written request to complete a withdrawal and this is especially common with those too-good-to-be-true-looking interest rate accounts. Additionally, some of the most attractive interest rates out there may require that you keep a certain minimum balance to actually receive that interest rate, so it’s important to consider your situation and how much, and how quickly, you anticipate needing access to your saved funds.
- Bank Reputation - Solvency and sustainability are key when it comes to evaluating secure institutions to save with. A bank’s backstory and track record tell you a lot about how you can expect a bank to operate in the near future, and the long term. As a long-term resident of Brooklyn, with over a 150 year history of serving the community and being a trusted banking partner, Dime has a strong, well-established footprint in the banking community that can truly stand the test of time.
At the end of the day, it’s important to do your homework when it comes to where, and when to save. And if something seems too good to be true, odds are it might just be. At Dime, we’re here to help sort through the savings noise and financial advice that can weigh on our customers, drop us a line anytime for more answers 1-800-321-DIME (3463).
1 Seeking Alpha; https://seekingalpha.com/article/4052451-interest-rates-market-keep-going