4 easy-to-fix reasons your savings account isn't growing

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Your savings account seems to be broken.

You set it up some time ago, full of hope and high expectations, and you have been moving money into it whenever you can — but it just isn't growing the way you would expect.

The lack of growth in your savings account may be disheartening, but it's probably due to a problem that you can fix easily. Here are the top four reasons your money doesn't grow in a savings account, and what you can do to start seeing higher balances:

1. The Problem: You Make Regular Withdrawals From Your Savings Account

The quickest way to undo all your savings work is to raid the account. Whether that happens because you are regularly transferring funds from savings to checking, or because you're withdrawing cash from your savings account at the ATM, or because you let your savings account act as your overdraft protection, the result is always the same — your savings account balance stays low.

The Easy Fix: Reduce Access to Your Account

The fix for this problem is to reduce your access to your savings account. Having too-easy access to savings accounts can kill your ability to effectively save money. Instead, consider moving your savings account to a different bank than your checking, and establish a link between the two. With your savings account out of sight, the money will be out of mind. And that's the best way to let it grow without your interference.

2. The Problem: Transfers to Your Savings Account Are Infrequent and Small

You transfer money to your account when you can, but that tends to only happen every couple of months when you finally get ahead of your bills. And even when you are able to make deposits in your savings account, the amounts are never very high. It almost feels like it's not worth transferring the money.

The Easy Fix: Automate Your Savings

Regular Wise Bread readers are well aware of the importance of automating your savings. Doing so allows you to pay yourself first and take away the temptation of extra dollars in your checking account. Set an automatic transfer up once, and you will reap the benefits of savings account growth for good. Remember that there are a couple of ways to make sure your automation helps you build your savings as much as possible:

  • Automatically transfer a set amount to savings on your payday. If you don't see it in your checking account, you won't spend it.
  • Have your paycheck deposited directly into your savings account, and transfer the amount you need for your monthly budget into checking. While this gives you less of a buffer in your checking account, it offers the psychological boost of seeing the numbers in your savings account go up quickly, which can help curb mindless and impulse spending.​​​​​​

RELATED: The 10 most valuable banks in America:

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The 10 most valuable banks in America
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The 10 most valuable banks in America

1. JPMorganChase

Current worth: $2.47 Trillion  

Photo credit: Reuters

2. Bank of America

Current worth: $2.19 Trillion 

Photo credit: AP 

3. Wells Fargo

Current worth: $1.89 Trillion 

Photo credit: AP 

4. Citigroup

Current worth: $1.82 Trillion 

Photo credit: AP 

5. U.S. Bancorp 

Current worth: $438.5 Billion 

Photo credit: Reuters 

6. PNC Financial 

Current worth: $361.3 Billion 

Photo credit: Reuters 

7. Capital One

Current worth: $339.1 Billion 

Photo credit: Getty

8. BB&T 

Current worth: $221.9 Billion 

Photo credit: Getty

9. SunTrust Banks

Current worth: $199.1 Billion 

Photo credit: AP 

10. Fifth Third Bancorp

Current worth: $143.6 Billion 

Photo credit: AP 

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3. The Problem: You Are Saving Money, But Not for Anything in Particular

Without a specific goal in mind, it can be difficult to get psyched about the money in your savings account. Yes, it's great that you have several hundred (or several thousand) dollars sitting in a savings account, but it can feel like having an auxiliary checking account if you don't have a specific purpose in mind for the money. And not having a goal for you money makes it much easier to raid the account if you find yourself lusting after Coachella tickets.

The Easy Fix: Create Targeted Savings Accounts

We are much more likely to feel excited about saving money if we have a specific goal in mind. This is partially due to something known as mental accounting, which is our tendency to value money differently depending on how it is physically and mentally labeled. You might feel no compunction about "borrowing" $400 from your general savings account for a Coachella ticket, but taking that money from your new car fund would hurt.

Many online and traditional banks will allow you to create several targeted accounts, each with its own nickname. Taking the time to put a name to each one of your savings goals can help you save more and spend less.

4. The Problem: Your Interest Rate Is Too Low

Maybe you are doing everything right with your savings account. You have regular, automatic deposits, and you keep your hands off the account. But it's still not growing — because the interest rate is at rock bottom. According to Bankrate, the average APY for savings accounts is a measly 0.08%, which means inflation is eating into your money if you leave it in your savings account for any amount of time.

The Easy Fix: Transfer Your Money Into a Money Market Account

If you are just getting started with savings, it's probably a good idea to continue to set money aside into your savings account. But if you've grown your savings account over time and get sick of seeing teeny tiny interest payments, then you might want to consider transferring your savings into a money market account.

These accounts are a type of savings product that double as a checking account, with an interest rate that is much more generous compared to that of traditional savings accounts. For instance, according to Bankrate, the best money market accounts offer APY rates of up to 1.11%.

Money market accounts generally require a larger minimum deposit — you can expect to need at least $1,000 to open your account. In addition, you may face fees on your money market account if you allow your balance to dip below a certain level. For most money market accounts, you may write checks on the account, although you are generally limited to no more than six checks (or other withdrawals) per month.

For savers who have been diligently putting money aside into a traditional savings account, rolling that money into a money market account can be a great way to put your savings to work for you by increasing your interest.

The Bottom Line

Your savings account deserves to grow and flourish. Most of the problems keeping your balance down are well within your control, as long as you take the time to address them. Don't let an easy-to-fix problem keep you from meeting your savings goals.

More From Wise Bread:
Has Cash Become More Trouble Than It's Worth?
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