Savings Accounts should earn you interest

Savings Accounts should earn you interest

19 December 2007

One of the things that people don't do when opening up bank accounts is to choose the right savings accounts. If you are saving for a specific purpose like a house deposit for when you apply for a home loan you should look at the interest rate offered on these savings accounts.

The same is applicable for when you open savings accounts that are for your children, whether it's for their first car, a home or even their future education. Choosing the right savings account will depend on how you plan to use it.

Also, there is taxation to consider when you open savings accounts for your children.

Make sure that you check with your accountant on what is required before you start withdrawing funds from the account. If you are using the kid's bank account to "hide" money from the taxman, then you could find yourself paying a tax rate of up to 66 percent.

Savings accounts are for you to build your wealth in the long term. The best way to do this is to try to get the biggest return on your money. Not all savings accounts offer you a great return.

Be sure to check the interest rate and what criteria is required on your part to get the maximum return. Some savings accounts have "penalties" if you make a withdrawal with your account earning almost no interest.(.01%) while you are expecting it to be earning you 10%.

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