Here's Why Dave Ramsey Warns You to 'Read the Fine Print' When Opening a New Bank Account
- Dave Ramsey suggests the interest rate is important when deciding which financial institution to bank with.
- He urges reading the fine print when it comes to the rate you'll be paid.
- By learning the details, you can avoid being sucked in by introductory offers that won't last.
Don't open a bank account without reading this advice from Dave Ramsey.
When it comes to opening a bank account, it's important to find the right place to park your money. Unfortunately, that's easier said than done since not all of the terms and conditions of accounts you may be considering are clear upfront.
In fact, sometimes banks obscure the realities of one of the most important features they offer. That's why finance guru Dave Ramsey warns people who are opening a bank account to always look at the details. Here's what Ramsey had to say.
Look for this key feature when choosing an account
According to Ramsey, it's especially important that you pay attention to exactly what a bank is offering when it comes to the interest rate you will be paid on the money in your account.
"Lots of banks will use special interest rates or introductory offers to get new customers, but those rates may not last forever, so read the fine print (even if it’s too small for a mouse to see)," the Ramsey Solutions blog reads.
Ramsey suggests looking carefully at the interest rate you will be paid for your checking account, your savings account, a CD, and a money market account if you are going to open any of these types of financial accounts with a particular institution. By looking at the details, including reading the fine print, "you can weed out the ones with the lower rates."
Is Ramsey right?
Dave Ramsey is absolutely correct when he suggests it is important to pay attention to the interest rate you are being offered by a bank or credit union that you are considering doing business with. This is especially true if you are opening an account with the goal of saving money for something in the future rather than if you are opening a checking account that will just serve as a temporary place for your money before you do other things with it.
Inflation is currently at a 40-year high, so if your bank is offering you a very low interest rate, the money you have saved will actually end up losing a lot of value over time. You aren't going to find a bank that will pay you interest that exceeds the rate of inflation right now, but you still want to make as much as possible from your saved funds.
After all, you want your money to work for you and at least help you keep pace with rising prices over the long term by earning a reasonable amount of interest. And it's important you understand exactly what you are going to be paid for keeping your money invested.
By doing your research carefully, you can find the best possible offer and take advantage of it without having to worry about changing your bank account in a few months when an introductory rate happens to expire. It's well worth the effort to get this right the first time, since changing banks can be a hassle and you don't want to get stuck earning a low rate of interest for years.
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