November 25th, 2009
Best Bets in High-Yield Savings Accounts
Looking for the best online savings account with the highest interest rate? It took the wake-up call of the worst recession in recent history, but Americans are beginning to save their money more than ever before. Conscious consumers have saved up a total of $10 trillion this year in bank savings accounts, savings certificates, and money market mutual funds, reports the LA Times.
Unfortunately, interest rates for savings accounts aren’t as high as they used to be. The government’s unprecedented actions to drop interest rates to record lows has been great for cash-strapped borrowers, businesses, and banks, but it has also meant lower interest rates for bank account holders. However, online savings account can give a much better return for your savings than your average bricks and mortar bank, for which the national average is only 0.31% APY, and is less risky than playing your savings in the stock market.
If you are thinking about switching to a high-yield savings account or opening up one for the first time, we have compiled the following list of some of the highest yielding savings accounts to put your savings to work (all featured banks require no minimum balances, no fees, and are free to sign up). With economic recovery slow and shaky and the holiday season in the air, having a solid savings plan is the best way to ensure you have sufficient savings in your bank account for the upcoming year.
|
Interest Rate
|
Minimum Deposit
|
Plus Points
|
|
|
2.01%
|
$0
|
Designate a single goal to your account and friends and family can deposit cash directly to help you earn towards your dollar amount goal. Can also put a portion of your savings towards a gift card from one of Smartypig’s retail partners, like Macy’s or Travelocity, which will also earn you up to a 12% cash boost on your savings.
|
|
|
1.70%
|
$0
|
Offers direct banking 24/7 so you can manage your account via web or phone. Also, fee-free online electronic transfers.
|
|
|
1.64%
|
$0
|
Known for its no-nonsense, no gimmicks approach to banking, has a reputation of simple and straightforward banking practices. Offers live online customer service chat.
|
|
|
FNBO Direct
|
1.40%
|
$1
|
Can open up multiple accounts for different savings goals, which you can see and track all-together when you log-in.
|
|
1.30%
|
$0
|
Set up an Automatic Savings Plan that allows you to regularly transfer fixed amount of money from your linked checking account to your ING savings account. Also, you can create unlimited sub-accounts for different savings goals.
|
|
|
1.35%
|
$1
|
Aside from online account management, you also have access to your cash anywhere through an HSBC ATM, where you can deposit or withdraw from your online savings account.
|
*as of November 23, 2009; variable rates subject to change
An alternative is to use a Rewards Checking account as a savings account and earn 4% to 5%. There are some extra hoops you have to jump through but they are simple. I have two of these accounts. Here is a list of banks offering 5% or more: http://www.rickety.us/rewards-checking/bank-rewards-checking/
These accounts are all FDIC insured and function just like a checking account but in addition refund ATM charges and usually require no minimum balance after opening.