Since the recession many consumers have been focusing on saving their money through online savings accounts and other programs like CDs and money market accounts. Finding companies that offer the best savings rates and low fees will help you to find a short-term or long-term solution to saving money.
Chapter 1. High-yield Savings Accounts
High-yield savings accounts are ideal for individuals hoping to make extra money within about a year or so. In the past, online savings rates were upwards of 3% or more but now most of the online savings rates will average around 1% to 1.15%. One such bank that is offering one of the highest APY’s is [mma bank=’Sallie’] Sallie Mae Bank[/mma]. Understanding the interest rates is important as it helps you to calculate how much money your investment will be able to make and how much you could potentially make by adding more money to the account. Remember other stipulations like account fees for withdrawals and transfer fees as they could have an impact on the total amount you earn. One important thing to understand is that the interest of high-yield savings accounts can (and usually will) fluctuate.
Most of the online savings accounts do not require a minimum deposit amount. View the best high-yield savings accounts on the savings account chart.
Chapter 2. CDs Versus Savings Accounts
With budget’s tight and the Fed’s current uncertainty, there’s not much of an advantage to investing in long-term CDs. Compared to investing in online savings accounts and money market accounts, the interest rates of CD’s are higher, however you must consider the possibility of tying up your money for years at a meager rate while savings rates and money market rates increase (well we all hope they eventually will). Because of this many of the individuals investing in the online savings accounts may end up with a greater return in interest money compared to those investing in a 5 year CD account.
Choosing an online savings account is a smart option as you have more flexibility with your account. If you find an online savings rate with another bank that is higher, you can jump onto the better rate and in most cases you will not face any penalty for closing the savings account.
Chapter 3. Research Your Investment
Like any investment finding the best online savings rates takes research. You need to shop around and find companies that are able to provide you with the highest online savings rate and not just those that are paying an average amount. To find the high-yield savings accounts or money market accounts that pay generous interest rates requires researching the large and small institutions.
Chapter 4. A List of the Highest Savings Account and Money Market Account Rates in the Nation:
- [mma bank=’Sallie Mae’] Sallie Mae Bank[/mma]
- [mma bank=’Capital One’] Capital One Bank[/mma]
When choosing an account, always make sure they are backed by the FDIC. (All of the above banks are FDIC insured) If you fail to find a bank that is secured by the FDIC you may end up losing your entire investment in the event that the bank does fail, which has happened often since the recession hit small banks particularly hard. Use the Ratecatcher.com’s comparison chart to find savings account rates and money market rates so you can make a well informed decision on where to invest your money.