(B]Breaking up is hard to do, but there's one relationship you may want to reconsider - the one with your savings account. According to an August 2019 survey from Marcus by Goldman Sachs, which polled 1,053 Americans who have savings accounts with both traditional and online banks, nearly half (49%) have had their savings account at a traditional bank for more than 18 years. Consumers tend to stay with what's familiar to them even though there may be a better alternative.
To help set up for financial success, it's important to first evaluate your current banking situation to make sure your financial institution has your best interest (literally) in mind. An option that may be better is an online savings account that offers a higher rate. For example, if you opened a Marcus Online Savings Account at its current rate, and had an initial deposit of $25,000, you could earn $500 in a single year, which is more than what you are likely to earn with a savings account at a traditional bank.
The survey also found that of those surveyed, 72% are satisfied with the interest rate on their savings account at an online bank compared to 34% who are satisfied with the rate at their traditional bank. So if you are looking for possible alternatives to your current savings account, an online bank could be a good place to start. If you are unsure of where to begin when evaluating your current bank or when looking to switch, consider the following:
1) What is the interest rate? Make sure you are not only saving your money but also growing it by exploring savings accounts with competitive interest rates. Online savings accounts often offer higher rates. To better understand how much interest you could earn, take advantage of tools such as this online savings calculator, which helps calculate how much you could earn with a Marcus Online Savings Account.
2) Are there any fees involved, or a minimum deposit required? Avoid savings accounts that require you to spend money to start saving money. Choose a savings account that is transparent and has no transfer or hidden fees. Also look for savings accounts that do not require a minimum deposit, so you can open an account on your own terms.
3) Do you trust the financial institution behind it? When it comes to your money, you want security that you can trust. Savings accounts from FDIC-insured institutions are protected by the FDIC, an independent agency of the federal government.
4) What does customer service look like? Knowing that the bank managing your money supports you and will get you the answers that you need is crucial. An online bank may not have branches, but it can still provide customer assistance through telephone support, chat or via email. Look for banks that have easily accessible customer service representatives and are leveraging technology to make your life easier. Taking a look at awards the customer service department has received from reputable sources can help give you a sense of what to expect.
By taking the time to explore your savings account options, you could make a difference in the interest and money you are accumulating each year, ultimately preparing yourself for a better financial future.