Deposit Your Savings into a High-Interest Bearing Account

Managing your money can be broken down into two key aspects. The first aspect is about how you can more efficiently use your money when you do spend it, and the second aspect is about how to grow the money you've saved. Most of the other articles presented on this website have dealt with ideas that cover the first aspect. This article will begin to explore the second aspect.

If you have put into practice some of the money saving ideas presented, you would have undoubtedly begun to notice that your bank balance is looking healthier than before. Now that you're beginning to save a good portion of your income, why not consider placing some of your savings into a high-interest bearing savings account.

What is a high-interest bearing savings account you ask? It certainly is a bit of a mouthful, but basically what it is is that it's like your current regular savings account, except it earns you a much higher rate of interest on your savings. In other words, the money sitting in your regular savings account could be earning you a lot more money if you place it into one of these high-interest bearing accounts.

Why would you want to deposit money into a high-interest bearing savings account? There are a few good reasons:

● Your savings will grow faster than in a regular savings account
● Having a second account can help to alleviate any temptations you have to spend what you have saved so far
● It can also help you keep track of how much money you have saved for a particular goal
● Many high-interest bearing savings accounts tend to have little or no fees involved so you end up keeping more of your savings
● It is easy to understand compared to other investment opportunities

There are however some disadvantages of having a high-interest bearing savings account such as:

● Some of these accounts relying upon being 'linked' to a regular savings account so you can only deposit and withdraw funds to and from that regular savings account
● Not being able to withdraw cash directly from them (but I argue that this is a good thing). This isn't always necessarily the case for all products however.
● For some of the accounts with the highest interest rates in the market, the only way you can transact on the account is through the Internet. This is how the financial institution keeps their costs down to provide you with a high interest rate.
● Some accounts are being offered by less well-known financial institutions rather than the major banks
● Having to consider how much money you need to keep in your regular savings account for your everyday expenses, and how much you can put away into the high-interest bearing account

In my opinion, the benefits far outweigh the disadvantages. To me, most of the disadvantages above are about you becoming more disciplined with how you manage your money. That can only be a good thing.

If you live in Australia, there is a fantastic website at infochoice.com.au that provides a comprehensive listing of all the high-interest bearing accounts available to Australians. There's even a tool that helps you compare each account's features so you can easily determine which one is best for your needs.

Over the years, I've personally been with ING Direct's Online Savings Maximiser and Community First's EasyStreet EasySaver products and have found both to be solid products. From my experience, a high-interest bearing savings account is certainly one of the easiest ways to help grow your money faster.

*Please note that this article provides only general information and should not be considered as financial advice in any way.