Not all savings accounts are created equally. If you’re looking for the best savings account, it’s important to look for a few crucial features beyond a great rate. Of course, that all important interest rate is usually the first thing consumers look for. But it shouldn’t be the sole decision on your hunt for the account that’s right for you.
For instance, you should know whether or not your deposits will be FDIC insured. The best savings account in the world would be nothing if it weren’t backed by the FDIC (or NCUA in the case of a credit union). That’s because this government entity insures bank deposits up to $250,000 per person, per deposit type in the highly unlikely event that the bank itself becomes insolvent. This means that even if the bank fails, your money is safe. The FDIC is backed by the full faith and credit of the U.S. government – which has never defaulted on these obligations since the FDIC’s founding in the 1930s. In an account that is not insured – your money could be gone and you’d have no recourse to get it back.
The best savings account, one that pays the best rates, will usually have a minimum balance requirement. This is also a great motivator to help you save – as you won’t earn the interest unless your balance is at or above that minimum balance. Of course, on the other side, you should be able to have access to make a set number of withdrawals per statement cycle. Six withdrawals tends to be the industry standard – more than that is prohibited by law. Any type of withdrawal counts in this case, whether it’s by check, by phone, ATM and so forth.
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