Frequently Asked Questions
What interest rates do my local banks and credit unions pay on savings?
The national average for savings accounts is currently 0.06% (obtained from the FDIC.gov website). Generally,
most local credit unions and banks pay less than 0.10%. Many of them pay only 0.01%. Wouldn't you rather
earn 12 times more interest than the average by taking 10 minutes to open up a new high yield savings
account?
What exactly is an online bank?
Online banks are exactly the same as your local banks and credit unions, however they don't have tens,
hundreds, or even thousands of locations around the country. This means they don't need to spend the money
to keep up buildings, landscapes, parking lots, lots of employees and equipment, etc. This allows online
banks to pay a much higher interest rate to their depositors. Online banks are just as safe and secure as
your local banks and credit unions. You access all your account information- including making transfers and
deposits- through your computer and/or smart phone. Many of the banks also have an app that allows you to
take a photo of a check and deposit it into your checking or savings account.
Are Online Banks Convenient?
Yes! You can access all your account information easily through a safe and secure website and/or phone app
(depending on the bank). Just connect your current bank with your new high yield online account and start
earning 12 times more interest than the national average today! Many online savings accounts also allow you
to use certain ATM's at no charge or reimburse you for a certain number of ATM withdrawals per month.
How do I deposit funds into an online bank?
It depends on the bank but most offer the ability to make deposits in the following ways:
- Online Transfer (ACH) - You first need to link your current checking/savings account to your online bank
account.
- Mobile Deposit - Use the bank's app to take a photo of your check and submit it securely.
- Wire Transfer
- Check by Mail
Are these online banks safe? What does FDIC or NCUA mean?
All the banks or credit unions we advertise are FDIC or NCUA insured- meaning your money is backed by the
Federal Deposit Insurance Corporation of the United States Government up to $250,000 per depositor per bank
for each ownership category. The FDIC sells insurance policies to banks which then insures the savings
accounts, checking accounts, certain retirement accounts, trust accounts, and several other types of
accounts against bank failure. The FDIC does not cover investment accounts such as mutual funds, life
insurance, stocks, bonds, and annuities.
NCUA stands for the National Credit union Administration and it is an independent federal agency backed by
the full faith and credit of the U.S. government. The NCUA insures savings accounts, checking accounts,
certificates of deposit and money market accounts up to $250,000 (the same as the FDIC).
Do I have to close my current bank account?
No! It is actually very convenient to have a local bank you can go into to get cash, deposit checks, get
cashiers checks etc. However, most local banks provide VERY LOW interest rates (0.01%- 0.08%). There's no
reason for you to leave your savings sitting in account that makes almost zero interest. You can easily
connect your existing local bank account with an online high yield savings or cd account and transfer your
savings in just a few minutes and watch the interest $$ accumulate each month.
Is 1.05% APY really worth opening up a new savings account?
Yes! If you deposit $10,000 into your new high interest savings account you can make $10 each month without
doing anything! It only took you 15 minutes to set up the account and transfer the money and then you enjoy
$126 of new money each year (assuming daily compounding). You will still need to pay taxes on the interest
at your current tax bracket. That money is credited into your account each month and then you start earning
interest on your interest. In just a few years you've saved enough money to buy a brand new tablet! Pretty
awesome for taking only 15 minutes of your time!
How quickly can my savings multiply at 1.00%?
If you put $10,000 into your high interest savings account and add $100 each month (you can even set up an
automatic transfer each month to make it easy) - the first year you will have a balance increase of $1,307,
by the second you've saved $2,625, and by the end of the third year you will have added a total $3,961 to
your initial $10,000. Your monthly contributions add up to $3,600 and your earn $360.60 in interest
(assuming daily compounding).
