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How to Start and Grow Savings

Fresh Start Resolution: Reassess Your Savings Account

It's a new year and a new you! Fresh Start is a short series detailing 12 helpful tips to start off the year right, whether it be to advance your career or increase your financial cushion. We've already given you advice on kicking your daily deal habit, quitting caffeine, and making a call to lower your bills. Here's another way to start afresh in 2012.

An important to-do on your financial list is to have a savings account. In a SavvySugar survey, the majority of readers said their biggest money worry of 2011 was not having any savings. One of the first things you need to do is to establish a savings account where you can start putting your money in. If you don't have one, it's time to get one. If you already have one, you might want to reassess the one you currently have. Here are a few tips to help you make the right decision:

  • Do some research: First, do some research to see which one will be the right savings vehicle for you. There are plenty of low-risk accounts to put your money in. Some institutions include online banks, community banks, and credit unions. You can also go to savingsaccount.com to find an account with the best interest rate. For other alternatives, check out these 10 low-risk ways to earn more on your savings.
  • Consider a checking account: Interest rates on savings accounts are pretty low right now and the rates seem to keep dipping. Some checking accounts offer better deals, although there are more stipulations such as the number of times you have to use your debit card. Bankrate did a study of the best high yield checking accounts a few months ago and there was one credit union that even offered a 6.7 percent interest rate. However, keep in mind that checking accounts are more liquid and it may be easier to spend the money in those types of accounts.
  • Before you pick: Make sure you read the fine print and know the restrictions of your account. For example in the case of savings accounts, there is usually a limit on how much money you can leave in the account and limits on how often you can withdraw or transfer money. Ask yourself these are restrictions you can deal with.
  • Leaving your bank: If you decide to leave your bank instead of moving your money around, there are several steps to take. You need to do some prep before you close your account such as opening a new account, making a list of your direct deposits and automatic withdrawals, printing out important records, checking to see if your bank will match your outstanding loans or give you a better deal, canceling your account, and asking the bank for what's left in your bank in the form of a check or cash. Get some form of confirmation (preferably a letter) that you have closed your account.
  • Wait it out: The process will take a while and it may even take up to about a few months for everything to clear, so be patient!
Source: Thinkstock
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