Linked Savings Account

What Is a Linked Savings Account?

A linked savings account is a savings account that is associated with another account like a checking or negotiable order of withdrawal (NOW) account. Generally, linked savings accounts are held at similar bank as the customer's different accounts, making it simpler to transfer funds between accounts.

How Linked Savings Accounts Work

At the point when a customer opens a linked savings account, the bank or financial institution associates it by account number to a new or existing checking or NOW account in the system. Since these accounts make it more straightforward to transfer money, they're advantageous for individuals who need to collect savings.

Linked accounts are now and then called packaged accounts. The balances on both linked accounts are generally reported on a single consolidated statement, making it more straightforward for customers to keep track of their money. Linked savings accounts likewise allow customers to keep the majority of their funds in a savings account, which might earn more interest, moving money into the checking or NOW account depending on the situation. A few packaged or linked accounts may likewise offer incentives, for example, lower fees or free checking.

The balances on your savings account and any checking, NOW or different accounts to which it's linked are generally reported on a single consolidated statement.

Special Considerations

Different types of accounts, for example, a certificate of deposit (CD), can likewise be linked to your other bank accounts. Banks might urge you to connect up numerous accounts (and keep on depositing money into those accounts) by offering special benefits, for example, a higher interest rate.

There are cases, nonetheless, where connecting accounts could lead to extra fees. For instance, one benefit of connecting your savings and checking account is overdraft protection. Assuming that your checking account balance goes too low, a few banks will naturally transfer money from your savings account into your checking account to safeguard you from causing overdraft fees. Notwithstanding, this service frequently accompanies its own fee. Plus, assuming you trigger that kind of transfer too much of the time, your savings account could fall below the base balance, which could make different fees kick in.

Assuming you find that the ideal checking and savings accounts for your necessities aren't available at a similar bank, you may likewise have the option to connect accounts from various banks. This can function admirably in the event that you're hoping to hold your extra cash in a high-yield savings account that may not be available at the bank where you do your checking.

Search for an option to interface outside accounts. You'll have to give more data to finish this, and transfers might take more time to go through. There are additionally in some cases limits on the number of outside transfers you can make every month.

Benefits of Linked Savings Accounts

Banks probably will need to boost linked savings accounts with the goal that they can hold a bigger share of your business for a more extended amount of time. This could mean higher rates for you, especially in the event that you're able to keep a higher balance. Plus, having your accounts in a single spot — with transfers available rapidly and effectively — works on money management.

Highlights

• Linked savings accounts are associated with another account, for example, a checking or negotiable order of withdrawal account, making it more straightforward to transfer money between accounts.
• Linked accounts are at times called packaged accounts.
• The balances on both linked accounts are generally reported on a single consolidated statement.

FAQ

What you ought to be careful of while opening a linked savings account?

Utilizing them might trigger extra fees, for example, overdraft protection costs. Assuming that your checking account balance goes too low, a few banks will naturally transfer money from your savings account into your checking account to safeguard you from causing overdraft fees. This service frequently accompanies its own fee. Plus, assuming you trigger that kind of transfer too much of the time, your savings account could fall below the base balance, which could make different fees kick in.

For what reason could consumers need to think about a linked account?

Linked savings accounts allow customers to keep the majority of their funds in a savings account, which might earn more interest, moving money into the checking or NOW account on a case by case basis. A few packaged or linked accounts may likewise offer incentives, for example, lower fees or free checking.