When you stash your money away in a savings account, you want to see the money grow. Unfortunately, many of the standard savings accounts offer pitiful interest rates. If you really want to put your savings to work, you should look beyond what the traditional, brick and mortar banks have to offer. All you need to do is follow this guide to finding the best interest rates on your savings accounts.
Don’t know where to find good interest rates? Have you tried…
- …online banks?
You’d be hard-pressed to find a traditional bank with interest rates worth anything. There isn’t a traditional bank account that can come close to the rates that online banks provide. If you’re scared of hackers or financial instability, you should stop worrying. There’s nothing to worry about with an online savings account these days. Online banks are FDIC protected and have strict encryptions on their websites. They also come with excellent round-the-clock customer service lines that can help you with anything. Since they don’t have to pay for physical branches, online banks can afford to cut back on charging you fees. Most banks offer between 0.75% to 0.95% but some banks, such as Synchrony Bank, offer over 1%.
- ...credit unions?
Local credit unions tend to offer better rates than their big-name competitors. The only downside? Not just anyone can sign up for an account with their friendly neighborhood credit union. First of all, membership might be limited to residence or employment by a certain business. If you can meet the requirements of a credit union, you’ll find that they are a great opportunity for keeping a modest amount of money. Often credit union accounts come with certain stipulations. For example, you might stumble upon an account that yields over 4% in interest, but you have to use your debit card a certain amount of times per month. You may have a relatively low account maximum, such as $10,000, as well.
- ...a certificate of deposit?
A certificate of deposit, also known as a CD, is a great savings option. This is the way to go if you don’t plan on touching your savings for several months or years. Typically, CDs have a maturity of three months to five years, and the longer you wait, the better interest rate you’ll get. You can find CDs on online banks, such as Ally Bank, which offers a CD with a yield of 1.86%. Sounds good, right? Certificates of deposit are a great way to snag a good savings rate, but you will be penalized for early withdrawals.