There’s More to Deposit Accounts than Interest Rates

Whenever deposit accounts are discussed — including savings accounts and certificates of deposit – much of the attention naturally falls on interest rates. There’s nothing wrong with all that. Interest rates are, well, interesting…. Still, you have to look beyond them when choosing bank products. They are a great starting point, but then you have to look at the other terms and conditions to make sure they don’t overwhelm any interest rate differential.

Fees are one example. Maintenance fees, transaction fees, or early withdrawal fees can exceed the amount of interest you earn under certain circumstances, so it is important to choose an account that will let you minimize or even eliminate these charges.

Then there are other special features. Discover Bank, for example, has a 12-month CD that will allow you to withdraw without penalty if you lose your job. That’s a recession-friendly feature. Most people think of Discover in connection with their widely-used credit card, but they are also one of the country’s 100 largest banks, offering savings accounts and CDs.

The point here is that interest rates are important, but don’t let your choice of deposit products be a one-dimensional decision.