Why Comparing Savings Deals Can Make You Money

by Pam on August 14, 2012

Everyone will tell you that you need to save money, and while it is a good idea to save, you should not just put your money into the first savings vehicle you come across.  Instead, you will find that it truly does pay to do your homework.  Although it will take some time, it will be well worth it in the end.

High Interest Savings Accounts

For example, if you want to keep your money in a regular savings account, select one that has no monthly fees or transaction fees, and make sure that it pays the highest amount of interest.  Most financial institutions have at least one type of high interest savings account, but not all are equal, so be sure to find out the details before making your choice.  High interest savings accounts are good for money that you need access to and for big expenditures that you have planned in the near future.

Bonds

Another savings vehicle that you may want to choose is to invest in bonds.  There are many types of bonds, so it is important that you determine your time frame before selecting one.  It is key that you compare fixed term bonds before making a selection so that you can make an informed decision and end up with the best bond for your particular savings goal.  If you have a short time frame you should select a bond that allows you to access your money when you need it.  You will want to stay away from long term bonds that can be more risky for a short term goal.

Term Deposits

Term deposits, also known as Guaranteed Investment Certificates (GICs), can also be a good option, depending again on what you are saving for.  When you invest in a term deposit, you are guaranteed a fixed interest rate but you usually have to lock your money in for a period of time.  Term deposits are only a good idea if you know you will not need to access the money in the event of any emergency.

There are many more savings vehicles to choose from, although the ones mentioned above are very popular.  If you have more questions, talk to a financial advisor that you trust.  And remember to shop around and not just passively do what one person tells you.  It pays to be informed and do your homework.  Treat your banking like you would your everyday shopping.  Remember that you are a customer and the bank is providing you a service.  Compare the products they are offering you with others in the market and make sure to choose the best ones for you.

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