High Interest Savings Account
High interest savings account is somewhat of an oxymoron as the average rate of interest is around 1.30 percent. In order to obtain the best rate of interest, consumers need to spend time comparison shopping banks and credit unions. Spending an hour or so online can help consumers earn upwards of an additional 1/2-percent or more.
One trusted source for comparing high interest savings account providers is BankRate.com. This website provides links to nationwide lenders along with an overview of intro rates, minimum opening balances, monthly service fees, and annual percentage yield (APY).
In addition to offering higher rates of interest than traditional savings plans, many banks offer savings incentives. For example, Capital One Direct Banking provides new customers with a 10-percent bonus on earned interest, while Ally Bank eliminates monthly service fees and minimum balance requirements.
It is important to compare monthly service fees and minimum balance requirements assessed on high yield savings accounts. Although a bank may provide a higher rate of interest, service fees can quickly deplete earned interest.
In addition to comparing high interest savings account rates through traditional banks, it is also a good idea to research online savings providers. Online savings refers to accounts which are accessed from the comfort of home. Some of the more popular online banks include EverBank, Ally Bank, E-Trade Bank, ING Direct Bank, Capital One Direct Banking, Dollar Savings Direct, and WT Direct Bank.
Another unconventional source for high interest savings accounts is Lending Club. This unique peer-to-peer lending program offers an impressive 9.60-percent average rate of return on high yield savings. Lending Club members invest and borrow from each other; thereby eliminating the costs associated with traditional banking institutions. Details of this unique high interest savings plan are presented at LendingClub.com.
Upromise is an organization that focuses on helping individuals save for college. Members can receive cash back rewards from Upromise partners which can be contributed to their SallieMae high yield savings account or tax-deferred 529 plan.
Members can engage in four money savings programs offered through Upromise. These include online shopping, dining at participating restaurants, purchasing eligible items at grocery and drug stores, and inviting friends and family into the program. Cash-back offers can be as high as 25-percent. Accrued savings can be used for college tuition or to pay off student loans. Program details can be located at Upromise.com.
Individuals who plan to buy a house or want to pay off credit cards and outstanding debts should consider opening a high interest savings account. Unless borrowers are obtaining a VA or FHA loan with low down payment requirements or utilizing NSP grants, borrowers must provide evidence of how they obtained their down payment. Home loan down payments cannot be obtained from outside sources, so borrowers must establish a history of regular deposits into their high interest savings account.
These are just a few options for obtaining the best rate of interest on savings account. The Internet provides a wealth of information and resources; however, consumers must engage in due diligence to ensure banks are FDIC-insured.
Additionally, we have published several articles in our personal finance article library to offer our readers additional information and resources to make informed choices. We add new articles each week, so take a moment to subscribe to our mailing list to be notified of newly published information.