When you are searching for savings accounts that can help you build a new egg you always need to compare account rates. The best rates on savings accounts are typically found online as these banks can offer a higher rate thanks to their low operating costs. When you do work with an online bank you will be able to access your account and move money from your savings account to your checking account in seconds but the funds may not be available for about 5 days or so.
Competition For The Best Rates
When you compare account rates it is important to try and limit yourself to about 5 banks. This is because banks are highly competitive for your business and it can take you days to sort through all of the information if you gather a large pool of banks. Using online bank rate comparison tools can help you to find out which banks are offering the best savings account rates. What are some of the things you need to consider as you compare rates? Here is a simple guide to follow:
- Banks will have different savings account rates but they usually remain close to the same amount as the rates are actually mandated by the Federal Reserve.
- Banks always have different requirements when you are using a savings account. Some banks will require a minimum deposit amount where others do not have balance requirements.
- Local banks may offer higher rates to existing customers.
- Savings accounts may be offered for free if you will open a checking account with the same bank.
- Compare account fees when you are looking for the best savings account. Most savings accounts do not have fees unless you overdraw your account but some banks do charge an ATM fee.
Create Savings Goals
Current savings account rates fluctuate on a daily basis and this can have a big impact on your ability to save money for the future. To find the best rates on savings accounts you want to use the online comparison tools but also use a savings calculator to help you find out how much you can save based on the current savings account rates. Even though the rates will go up and down over time, you can get a pretty good idea as to how much money you need to put away each month in order to reach your savings goal.
Even though you want to find the best savings account interest rates you still need to consider a few other things when making your decision. The best banks will provide you with easy online account access. When you use these banks you want to make sure you understand how to navigate their website and to find out when they do updates to the site just in case you are locked out of the account for a few hours. Do they offer online customer service support or a toll-free phone number you can contact if you do need help in managing your savings account? Read through online reviews of various banks before you do open a savings account with them to make sure the bank has a solid reputation and customers are generally happy with the services provided by the bank. Always check on the security of the website as well to know that your account information and personal information will be protected.
Online savings account rates may be higher from local banks but you have to really check into the bank. One of the things that you need to be concerned about includes the account protection offered by the bank. Are they insured by the FDIC? The FDIC insurance will provide you with security up to $250,000 in the event that the bank fails. This way you know you will get your money back no matter what happens!
Where To Start?
When you are comparing account rates on savings accounts the best place to start is online. As we mentioned earlier these banks can give you the best savings account interest rate because they have lower operating costs since they do not have as many physical branch locations as local banks. Some of the best banks that continue to offer the best account rates include the following:
- American Express
- ING Direct
- Ally Bank
- Sallie Mae
The reason these online banks tend to get higher rates is not only based on the fact that they have the top savings account rates but they continue to get high reviews from their customers. They do not have minimum balance requirements nor do they have hidden account fees that you need to be worried about. Compare the account rates of these online banks to your local banks and you can easily see how much more money you can earn in interest just by switching your savings account to an online bank.
History DOES Matter!
When you are comparing account rates you always need to check on the history of the bank. How long have they been in business and have they ever declared bankruptcy or been in a poor financial position? The best banks know how to properly invest their money so they aren’t spending every dollar that their customers place into the various accounts that they provide. The history of the savings account rates may not matter as much since the rates are controlled by the Federal Reserve so banks really do not have a lot of say in how much money they can provide you in interest. However banks with lower operating costs can usually give back higher returns to their customers. This is why you want to check up on the reputation of the bank to see what customers are actually saying about the bank and you want to find out why some of the past customers switched banks.
Saving money is one of the best financial investments you can make. It will protect you against debt as you rely on your savings account instead of on credit cards when you have a financial emergency. Financial planners recommend that you have at least 6 months of your income stored in a savings account to pay for emergency needs. Use automatic deposit to transfer money to your savings account so you can continue to save money without really needing to think about it! Even though the interest rate on savings accounts is relatively low to other investments, savings accounts are a liquid investment so you can withdrawal the funds immediately in the event of an emergency. Compare account rates today and start building a large emergency cash fund to protect your family from financial disaster!