Top 6 factors you should consider when opening a savings account

A SAVINGS account is the primary transaction that every individual performs with a financial institution, majorly banks. This account allows you extra income from interest paid on the savings. Although, this account has a lot of significance in your investment portfolio, the fact remains that it is the least researched. The following key factors will help you in choosing the best savings account.

Interest rate. Interest rate for a savings account is one of the lowest when compared with other investment avenues. Most of the banks offered between 3.5 and 3.9 percent, or higher percentage to lure customers. Although, the higher rates are attractive, you must understand the fine print for these rates of interest before choosing a bank.

Minimum cash balance. Typically, banks have zero or low minimum balance (between N5000 and N10,000) to be maintained in the account while some demand higher minimum balance from N50,000 and above. Thus, it is always advisable to go ahead with a bank that doesn’t lock substantial amount in the account. Presence or network of the bank.

 The current generation is thriving on web based applications which has extended into banking sector in the form of “Online banking” or “Mobile Banking”. But, there are certain transactions that require you to visit the branch. Hence a   widespread branch network is a critical factor you should consider

Service charges /ancillary fees. Some banks will charge you for ancillary services like SMS alerts, duplicate ATM card/PIN number for every financial year. Ensure that you are well-aware of these charges at the time of opening a savings bank account. Having said that, transparency on the bank’s end is more critical than offering comparatively lower operational costs. Debit card deals. In order to differentiate from competitors, most banks offer deals on their debit cards which range from cash back to insurance coverage. 

However, certain banks also levy annual fees on their debit cards while some waive this amount if annual transactions cross the minimum set limit. For instance, banks offer gold and platinum debit cards which offer a host of benefits but include a yearly fee. In the consumer-driven setup that exists these days, it is always wise to analyze all these factors before opening a bank account for convenient usage in the long term.