Banks interest rates fluctuate on a daily basis, making it hard to determine which banks are the best banks to work with. When you are looking for interest rates on savings accounts it helps to use a rate comparison tool that will give you a clear snapshot of the interest rate, fees, and other account terms.
Using A Savings Account
One of the best ways to save your money is by investing it into a savings account. Savings accounts are low-risk investments that allow you to have easy access to your money when you need it. This is unlike CDs which may have a set term on them, making it difficult for you to access your money during this time. The downside to most savings accounts is the interest rate. Typically savings account interest rates are low-paying but compared to leaving the money in your piggy bank, at least it is earning something! The good news is that there are high interest savings accounts, which make it much easier for you to build up a strong savings in a timely manner.
Interest Rates On Traditional Savings Accounts
The interest rates on traditional savings accounts are less than 1%. These accounts are commonly referred to as a “passbook” account and are offered when you open a checking account or some other type of investment with a bank. While it is nice to have the savings account so you can set aside money, it won’t build up into a large amount unless you are investing a lot of money into the account each month. One of the nice things about a traditional savings account is that it is protected by the FDIC so you don’t need to worry about losing your money as long as you have less than $250,000 in the bank.
Interest Rates On High Yield Savings Accounts
If getting less than 1% in interest money is not an option for you (and really who WANTS to get a low interest rate on savings?) than you need to shop around for a high yield interest savings account. With these savings accounts you will get an interest rate that is around 1% or higher, but the rates have been known to be as much as 5% in the past. Current interest rates on savings accounts are quite low due to a bad economy but they are bound to increase again as the economy recovers. The interest rate is higher as you usually need to deposit a larger amount but the interest usually is compounded on a daily basis, which helps you to earn more.
Details You Need To Know
We have reviewed quite a few high yield savings accounts and there seems to be a common theme among them, the minimum balance requirement. A high yield savings account will come with a minimum balance requirement in order to give you the higher interest rate as the bank will take some of the money you deposit and invest it into other things. This is how they can afford to give you back more. Some banks may require that you open the account and keep it open for at least 1 year with the balance requirement in order to get the best rates on savings. The more money you have in the account, the more money you will be able to earn in interest as the rate is typically compounded daily.
Finding The Best Rates
So where should you start shopping when you are trying to find the best rates on savings accounts? You can start by talking to your local bank and to find out if they will offer you a high interest savings account. Many banks will offer these accounts to loyal customers or individuals that are willing to invest a large sum of money into the account. Most local banks won’t be able to compete with the interest rates you will find with the online banks. Use our helpful savings rate comparison tool in order to find out which banks are offering the highest rates and also to check on account fees and other details. Comparing multiple banks is the best way to select the right bank for your financial situation. When you compare banks you want to look at not only the account terms it also helps to learn about the financial institution. You want to work with a bank that has a solid reputation not only in the way they manage their accounts but also with customer service. It is nice to work with a bank that truly respects their customers and focuses on making it easy for you to save your money with little hassle.
Are Online Banks For You?
The online banks usually have higher interest rates to offer as they don’t have as many costs to deal with (like managing multiple branch locations). The online banks do have some downsides as you will need to wait for the bank to transfer the money as it’s usually not accessible right away unless you have an ATM. ATMs usually have fees that are listed with them that you also need to consider when you are debating between which high interest savings account is right for you. Some of the online banks may have an interest rate that seems higher from all the others. This indicates a red flag meaning it may not be backed by the FDIC or you could end up dealing with a monthly maintenance fee, which can easily knock out all the interest money you are able to earn. When you deal with an online bank, you will need to understand how to properly navigate their website and you must feel comfortable dealing exclusively with online bank tellers. You aren’t going to get the same customer service like you do at a local bank so you really need to consider how important that is to you when you are comparing rates on savings accounts.
If you want to save your money in a secure way, you need to use a saving account. These accounts are great for rainy days along with saving money for future needs as well like a down payment on a home or a car. As long as you compare banks interest rates ahead of time, you will be prepared to open the best savings account out there!