Are you earning the most from your savings and money market deposit accounts?
Deposit accounts are the pillars of a strong financial foundation, providing you with financial stability as you work to achieve your financial goals. Many banks and credit unions offer a variety of savings and money market accounts, and this article aims to help you find the highest interest rate for this type of deposit account.
Of course, a high interest rate is not the only factor to consider when selecting an account. This article will help you choose the best deposit account for your specific needs.
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Finding the best savings account rate is a simple matter at first glance: Just look in the right place for what you want. Looking at individual bank site or visiting physical branches is time consuming, so skip the individual search and look online for sites that aggregate the best deposit account rates.
Remember that the best interest rate is not the only factor to consider; you should also consider the fees and make sure that you maximize your earnings and convenience with your savings.
The following information was last reviewed and updated on June 10, 2013. Rates and conditions change constantly, so please review the information on the bank’s website carefully before you open an account. All banks are FDIC insured.
|0.89%||Everbank Yield Pledge® Money Market Account offers 1.10% bonus rate for the first 6 months, or 1.01% APY for the first year on a balance up to $50,000. $1,500 minimum opening balance required. Their fee structure was recently improved.|
|0.75%||Capital One 360 Savings(TM) offer a high 0.75% APY and it is very popular among savers. You can access your account around the clock and open your account online in under 5 minutes.|
|1.00%||SmartyPig is an FDIC-insured online savings bank where you set up savings goals and put money toward your goals. You can get up to 11% boost by trading your money for a gift card from one of the participating retailers.|
|0.90%||Barclays Online Savings. No minimum balances. No monthly maintenance fees. Daily compounding. Also offers CDs.|
|0.85%||FNBO Direct Online Savings Account offers 0.85% APY. Open an account with as little as a dollar. No monthly fees. No balance minimums.|
|0.85%||American Express Personal Savings. No Fees. No Minimums. 24/7 Account Access. Also offers CDs.|
|0.85%||SallieMae High-Yield Savings Account. No minimum balance. No monthly fees. Easy online account management, 24 hours a day.|
|0.84%||Ally Bank Online Savings Account offers competitive rate of 0.84% APY and easy access with no minimum balance and no monthly fees. Ally was rated “Best Bank” by Money Magazine in 2012.|
|0.80%||Discover Bank Online Savings is a product from the same reputable organization that offers the Discover Card. In addition to competitive online savings rate of 0.80%, Discover Bank also offers money market account (0.70% APY), CDs, and IRA CDs.|
|0.80%||CIT Savings Account offers 0.80% APY interest rate with a $100 minimum to open. You can increase the APY to 0.85% when you maintain a daily balance of $25,000 or more. No account-opening or monthly maintenance fees. Your interest is compounded daily to maximize your earning potential.|
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In addition to high yield savings accounts and money market accounts, here are some alternatives that may work for you:
|Lending Club is a SEC-registered social lending site where you can invest in 3-year and 5-year loans with as little as $25 per loan. The interest rate you earn depends on the quality of the loan (based on borrower’s credit rating, loan amount, loan length, etc.) Currently, Lending Club claims 93% of lenders earn between 6 to 18% APY. To learn more about peer lending, please read Introduction to Peer-to-Peer Lending. You can also check out a similar service from Prosper.
IMPORTANT: Please note that there are special risks associated with social lending.
|Discount Brokers: Many discount brokers offer a money market account that acts as the default account for fund deposited into your brokerage account. It usually pays some interest (not as high as an online savings account), but a brokerage account also gives you access to other investment opportunities, e.g., income investing in dividend paying stocks.|
|High Yield Checking Accounts: Generally, there are more restrictions around high yield checking to be eligible for the best rate. However, it may be worthwhile if you can meet the requirements. Currently, Capital One 360 Checking offers a high yield checking account that pays up to 0.85% plus a $50 sign up bonus.|
|Certificates of Deposit: Another option to high interest savings is certificate of deposits. There are CDs with term as short as 3 months and as long as 10 years. Generally, longer term CDs pay more than savings, but require long-term commitment.|
If you know a bank that offers a higher rate than the ones above, we’d love your insight in the comments.
What is the best way to choose a savings account?
When selecting a savings account, determine the features that are most important to you. For example, you may order the features as follows: high interest rates, good customer service, low fees, and good reputation.
Are online savings accounts better than a traditional one?
Online savings accounts are more popular each day. Typically, you have to complete most of your transactions online or using the ATM, since there may not be brick and mortar locations in the “real” world. In exchange, you enjoy a higher interest rate than normal and pay lower fees.
How does FDIC insurance protect savings accounts?
When selecting a bank, make sure that it is FDIC insured. The federal government offers this insurance to participating banks and it protects your money (up to $250,000 per depositor at each banking institution) against loss in the event that the bank goes out of business.
What does FDIC deposit insurance cover?
FDIC insurance covers all deposit accounts, including savings accounts, money market accounts, certificates of deposit (CDs), and checking accounts.
Please review information associated with each offer before you sign up. Rates and conditions change constantly and I have reported what I believe to be the most accurate information at the time the article was updated.