Off The Beaten Track

How to pick a savings account

So you’re probably concerned about how one should go about picking the right savings account. With so many products out there you can help but be overwhelmed by the process and simply settle for whatever’s on offer because it’s just easier that way. Yet you should think very carefully about your plans and objectives before you settle on a savings (or several) account(s).

The first thing you need to ask yourself is: what am I saving for? You might have one, or three things you’re savings for and they might vary in importance and financial value. For instance, you could be saving for a deposit for a house or a holiday while you’re building up your emergency savings fund and still focusing on having a formidable investment portfolio. Add to this thinking about life cover, medical aid and insurance (if you’re also buying a car) and you might be tempted to hand everything over to fate and go on cruise control.

When choosing a savings account it’s important to consider what you’re savings towards, ease of access and the cost of having that savings account.

Having a goal

What are you saving for? This can help you identify which account you should be looking at. If you’re saving for a deposit for a home, for instance, you might want to look at a fixed deposit option with a 30-32 day notice period. Think about how many months it’ll take you to save up for that deposit (don’t forget transfer duty fees and extra costs).

Saving for an emergency will be different, as will saving for a career change or business launch where you might need to survive on your savings till money starts coming in.


This ties in with your goal. If you’re setting up an emergency account for ‘everyday’ emergencies (burst pipe, broken window, your heels broke while you were fabulous strutting in Sandton) then easy access will be what you’re looking for. Think about having a savings account linked to your main cheque or transactional account where moving funds is easy and doesn’t require too much of a fuss. Also be aware that setting up this type of account requires a lot of self discipline, so be sure to only dip into it when you absolutely must (a 2-for-1 sushi special 5 days before pay day doesn’t count).

If you’re looking at saving for the next 6-12 months and over, then a fixed deposit with fixed interest rate might be where you want to look. Shop around here, because there are once-off fixed term deposits ie, you make one lump deposit and invest it for a certain period (usually a month up to 5 years) or fixed deposit account where you can make multiple deposits over a fixed period.

Cost of saving

Look carefully at how much it’ll cost you to keep your account open. Some savings accounts offer a little interest but also charge a monthly admin fee. The last thing you want is to lose money because your bank fees exceed the interest that you receive. Look at the account requirements as well. Some accounts need you to have a minimum balance in order to earn interest and/or for you to invest for a certain period.


You can check out the big four (and the up and coming number 5 5) banks and their savings options. Read the fine print carefully, understand the terms and conditions, look at your personal needs based on the guidelines above and make sure you’ve compared across banks.



First National Bank


Standard Bank

1 Comment on How to pick a savings account

  1. Reblogged this on Diary of A Reformed Debtaholic and commented:
    New on


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