Preface | User's Guide | Table of Contents

Banks and other savings institutions offer a wide variety of savings options. Recent federal legislation nicknamed Truth-in-Savings helps consumers sort through the large number of variables impacting interest e required for credit transactions.

APY is an important piece of information for consumers to have because there are so many variables affecting the interest earnings on a savings account, not the least of which are how the interest is calculated and when it is credited. The stated interest rate for an account is only a starting place. The more often your actual earnings are calculated and credited to your account, the higher the APY, and the more money your savings earn.

When shopping around for a savings account, whether a certificate of deposit (CD) or statement account, look for the highest APY relative to the stated interest. This will mean that your money will be earning "at its greatest potential."

Banks are now routinely charging fees on statement savings accounts. These charges can be for:

• Excessive number of withdrawals (when the number of withdrawals exceeds the number allowed during a stated period).
• A "dormant" account – one that has not had any activity in some period of time.