Something to consider and research before signing up for a specific savings account is its interest rate. Basically what returns are you going to get from this bank or provider for allowing them to hold your money? It’s one of the many ways they compete with each other for your business. Some use tactics such as a savings account bonus or flexible withdrawal options; others focus on interest rates to lure you in.

The variation of interest rates is wide and will depend on a few things. Most commercial banks have set interest rates that they do not have the ability to move on because of the nature and size of their business, other smaller providers can often be more flexible in tailoring a rate to suit your needs at the same time securing your custom. The financial situation of their industry can most definitely have an impact on the rates they are offering. The amount of money you are willing to deposit can sometimes have an affect also. Once you look at options such as a term deposit rather than a savings account your interest rate options will vary even more.

Sometimes a rate will be fixed for a certain period of time, say the first year, then reduce to a standard rate. During that first year you may see returns that considerably contribute to your savings, although the drop the next year may see next to nothing returned to you. With these types of offers seriously consider your saving goals and how long it will take you to achieve them before committing.

Often a low interest rate is compensated for in other ways such as a savings account bonus. A one off sign-on payment you would receive for opening the account. Depending on your saving goals a bonus like this can be more effective in helping you reach those goals than a mediocre interest rate.

If you have a good relationship with your existing bank they will sometimes be able to offer you a competitive interest rate on your savings account. A lot of banks and providers reward long term custom with better rates than a walk in customer may have access to.

Consider how often interest payments will be made to you. It could be monthly, 6 monthly or annually. Are the estimated interest payments likely to be more than the fees on the account? This is something important to consider.

Before sitting down with one particular bank or provider make sure you’ve done your homework and have a basic understanding of what the competition is also offering – including their possible savings account bonus. They will know exactly what is out there on the market but will assume you probably don’t.