1. Don’t just open a savings account, open one that earns you more interest.
The minimum interest paid to all savings account holder is 4% per annum. However this is only applicable when the account holder does not make more than four withdrawals in a month. Most banks have some other class of savings account that yields more interest (though with some clauses attached) than the normal savings account. As a smart customer, it is not bad to have more than one accounts with a bank depending on what you are after. If savings is your motive, don’t just open a normal savings account; ask for the savings account type which you are sure wont withdraw from in a long time. With this, you will earn more than the conventional 4% per annum. This is different from Fixed Deposit. In fixed deposit, you have a particular amount already which you wish to save with the bank at an agreed rate and tenor.
Personally, I operate two savings account with my bank. The first is the conventional savings account (I do not expect any interest paid here because I withdraw even more than four times) while the second is strictly for savings. This second class of account gives me up to 6% per annum monthly as long as I keep to the rules of operating that account. Technically, I am able to make up for the interest which I do not get in the normal savings account and even more.
2. Realize that you have a bargaining power.
A few days ago, after a proper discussion and lecturing of my friend, he chose to fix some monies he had with his bank and as usual, he had to write. In the body of his letter to his bank, he wrote ‘this money should be fixed at the bank’s prevailing rate’. This is one very common quote in most of our Fixed Deposit instruction to the bank. When next you want to fix your money, ask to know what the current rate guide is please. Do not tell the bank to fix at their prevailing rate; it is weak bargain. A rate guide helps you in understanding how to go about bargaining your interest with the bank. And even after knowing the rate guide, you still have the right and power to bargain more. The practice of banking especially when it comes to parting with your cash is similar to that of a normal market place. You must learn to bargain and also learn to walk away when it is not favorable. As long as you are on the giving end and not the receiving end, the banks will always be interested to have a business dealing with you.