Factors for Deciding Where to Save

When deciding where to save, you should consider the following:

  • Deposit requirements for the savings account: Is there a minimum deposit required to open the account?  Is there a minimum balance required to keep the account open?  Are small deposits accepted?  Can variable sums be deposited? Can deposits be made frequently? What paperwork is required?
  • Terms of use: Is the saving program compulsory or voluntary?  Do you have to commit to saving a set amount at regular intervals or over a certain period?  Are there rules about how much you must deposit and when? Are there rules about how much you are allowed to withdraw and when?  Can you withdraw the money at any time without penalty?
  • Cost: What fees are charged for deposits, withdrawals, or passbooks? Some forms of saving may lose value during times of inflation or economic instability. You need to consider such costs even though they do not involve the payment of actual fees.
  • Access/Ease of use: Is the account convenient?  What are the institution’s hours of operation?  Is it open at convenient times? How far is the institution from your home or workplace? Are transactions quick and confidential?  What is the quality of customer service? Is the atmosphere comfortable and friendly? Are there long queues at the teller windows? Is the information on the account easily available?  Does it provide statements? Are they easy to understand?  Are the application procedures easy to follow? Does it have an ATM network?
  • Safety: What is the reputation of the institution? Does it have insurance or other guarantees to safeguard funds?  Are the telephone or electronic transactions safe?  Is the bank or its branch located in a safe neighbourhood location?
  • Liquidity: How easy is it to withdraw funds from the account?  Will the full amount be available?  Are fees charged if the funds are withdrawn before a specified date?
  • Interest: Will your savings earn interest?  If so, how much?  How and when is the interest paid?  What is the difference in interest rates earned across different types of savings products or plans?

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