Interest rates on savings accounts can help you to increase your emergency cash fund much faster than just letting your extra cash sit in a piggy bank! Finding the best savings rates on your account will come down to comparing rates with several banks and really looking for a bank that can provide you with a safety and security for your investment.
Comparing Savings Rates
Current savings interest rates vary on a daily basis. This is why it is important to compare rates with several banks in order to find a bank that can give you a higher interest rate on your savings account but to make sure you are not paying a lot of money toward account fees. Many banks have transfer fees, minimum balance requirements, and a handful of other account terms that you need to meet in order to maintain an account with the bank. If the interest rate is the main motivation for your savings goals you should compare savings interest rates with online banks. The online banks do not have as many branch locations so this allows them to maintain lower operating costs and they can pass along the savings to their customers. However do not discredit your local bank as they could provide you with lower account fees if you already have a checking account or another type of investment account with them. A good rule of thumb to follow is to compare interest rates on savings accounts with about 5 different banks so you can find the best bank to work with.
The Best Online Banks To Work With
As you use our online comparison tool to check on savings account interest rates you will see that the banks are updated daily. This can help you to find out which banks are going to give you the best return for your investment. It also helps to see what the terms of the savings accounts are such as balance requirements and so forth. Look at the track record of the bank and read online reviews from current and past customers to help you learn more about the reputation of the bank. Some of the highest interest rates have been found with the following banks over the years:
- Sallie Mae
- ING Direct Orange Savings Account
- Ally Bank
Over the years these 3 online banks have been able to provide their customers with quality customer service but they tend to provide you with the best savings account rates out there. Many online reviews of these savings accounts are positive, which is also comforting when you are comparing banks to find the best one to use to stash your cash! One of the other great things you will find with these 3 banks is that you can set up your online account in just a matter of seconds and they do not ask for a minimum deposit and they also DO NOT include account fees! This makes it easy for you to save your money as you can set up an automatic transfer from your existing checking account and start earning interest in just days.
The Federal Reserve
Banks interest rates are set by the Federal Reserve. This is why the savings account interest rates fluctuate so often. When you are comparing interest rates on savings accounts you will typically see most of them are going to average close to the same interest rate with perhaps a very slight fluctuation. The banks that have higher interest rates on savings accounts may not be secured by the FDIC.
Always check on this to make sure you are not putting your money into a high-risk account where you could lose all of the money that you have been able to accumulate. The FDIC insurance on your savings accounts will give you protection up to $250,000. To find out if your bank is insured by the FDIC you can use their bank find tool to not only make sure they are insured but also to find the closest branch location.
When you look at the savings interest rate you should also consider the other investments offered by the bank. The goal is to SAVE YOUR MONEY so you need to compare some of the other things that the bank can provide you win in order to reach your savings goals. Some of the things that you can consider shopping for include the following:
- Money Market Accounts
- Certificate of Deposit Accounts
- Life Insurance
- IRA accounts (Can you roll over your IRA to this bank?)
One bank that you might consider working with if you want a solution for all your banking needs is ING Direct. They offer a number of online banking solutions that can easily help you to meet your savings goals. From high interest savings accounts to retirement account and home loans, ING Direct can easily become the best bank for your financial needs. Compare the interest rate on savings accounts with ING Direct and other banks to see that you are being treated fairly. It also helps to consider the history of ING Direct and to see why they have been one of the best online banks for several years. Thanks to their easy-to-use website and the high interest rate savings account options they offer, they continue to be listed at the top of most online comparison charts for the best savings rates.
Knowing Your Savings Goals
When you compare interest rates on savings accounts you also need to consider your savings goals. How often will you transfer over money to the savings account? There are some banks that will end up closing your account if you do not make any transfers to the account within 12 months. If you open an account and it remains dormant, there is no point to opening the account in the first place. The best thing you can do to earn the highest interest rates on savings accounts is by continuing to add money to the account and limiting your withdrawals. A higher balance will earn more interest money and it can easily help you to meet your savings goals whether they are to have emergency cash stored away or to help you save up money for a down payment on a car loan or home mortgage, a savings account is a smart investment.