Friday, November 16, 2018
Savings Accounts Guide, Banking & Interest Rate Resource.

Savings Acounts Interest Rates Facts:

Never take for granted that you earn interest wherever you deposit your funds. Some banks currently don't pay any interest at all on savings accounts. So when you open an account, make sure you do. And if zero interest comes as an attached condition -- don't expect to be told so. Under normal circumstances it probably won't be offered to the prospective account holder.

The rate of interest normally varies on the type of account, whether the money is deposited into a savings account with a bank or savings and loan institution, a certificate of deposit, a money market account or in a money market fund. There are three general corollaries related to getting increased interest rates and these have to do with:
  • The less access you have to making withdrawals, the greater the rates of interest are possible, and

  • To reach these higher rates, normally means a type of account that requires raised minimum deposit amounts, and

  • Restrictions are imposed on making withdrawals with the greater the payout, so a time obligation, in-turn, on the depositor becomes part of the deal.
The time that interest payment is issued on accounts is also important. Everyday savings accounts that do pay interest, normally do so on a monthly basis, and this is recorded in the statement. However, CD's and money market funds usually require that the funds are held for at least six months to a year in duration before interest is paid.

The way that interest is calculated means all the difference. The APY, the annual percentage yield, gives the yearly interest rate. If your bank states interest rates in terms of monthly percentages, look for the equivalent in terms of APY (per the Truth in Lending Act). While how often the interest is compounded matters enormously, based on the simple concept that money grows quicker with the greater the frequency of compounding.

Ideally, for an interest bearing account, the rate earned for monies in a savings account is compound interest (compounded daily, though not always) and that is interest being paid on both the principal and the accumulated interest. Indeed better than a simple interest proposal, all other things being equal.

Savings Account Funds and Balances
  • Beginning Account Balance
  • Ending Balance of Account
  • Available Balance
  • Available Funds
  • Average Daily Balance
  • Anticipated Balance
  • Average Daily Float
  • Collected Balance
  • Average Collected Balance
  • Uncollected Funds
  • Reg CC/Expedited Funds Act
  • Check 21/Savings Transfers
  • Online Bills & Savings

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