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Getting the Most from a Savings Account

  

Interest RatesHow would you like to make around 5% interest on your savings account? You can, and I’m going to tell you how. Most people don’t even realize that they can make more money than what they’re making now, and all it takes is ten extra minutes out of your day. If you still have the majority of your money (savings) in a traditional bank, then you’re losing out on extra income. A traditional bank offers pathetic rates (around 1%) when it comes to the interest that one can earn on their savings account. Move your savings from a traditional bank into an online savings account and you could be earning 5%, and possibly more!

It is shocking to know that only a limited number of people decide to move from a traditional bank into an online bank. I’m not quite sure what the reason for that is. Maybe it’s due to the fact that people don’t feel secure putting their money into an online account. Maybe they need instant access to their money at all times. Or maybe they’re just lazy or don’t know how to start one up. Well, I can tell you that setting one up is as simple as driving a car. You simply go to an online bank’s web site and follow the on screen instructions. You can link up your current checking account with your online account so that it’s simple to transfer money back and forth. No paper mess to worry about. If you still have a traditional bank savings account, move your money NOW because you’re not earning any interest off of that account.

There are many options for you to choose from when you do decide to go with the online account. Interest rates and other factors are compared at Bankrate's rating page. You don’t necessarily have to go with the bank that is number one on that list. In fact, I would suggest not doing that. You want to look through that list and find a bank that is very reputable and has a great Safe & Sound rating. The Safe & Sound rating is Bankrate’s way of rating the overall appeal for an institution. I have found Capital One to be a great overall bank that is consistently towards the top of that list. Also, with Capital One there are no minimum investment fees or yearly fees to worry about. Put your money into the account and let it grow.

Of course, interest rates tend to fluctuate a lot in a given year. Rates are really high right now, and they’re definitely going to fall back at some point, but don’t let that discourage you from putting your money into it now! You can’t beat the current rates, and you might as well take advantage of them while you can. Even when they do fall back, they won’t fall as low as traditional bank interest rates. The ONLY downside that I can see for an online account is that you don’t have INSTANT access to your money. With a traditional bank, all you need to do is go to the institution and make a withdrawal. With an online bank, you have to wait 2-3 days for the money transfer to go through. That means nothing if you don’t need your money IMMEDIATELY, but it is something to consider.

Visit Bankrate for all sorts of excellent information regarding online savings accounts.

try EmigrantDirect 5.05% or HSBCDirect 5.05% instead

This article is featured in this month's Carnival of Future Millionaires! http://howtomakeamilliondollars.blogspot.com/2006/10/carnival-of-future-millionaires-up.html#links

With HSBC Direct you get a ATM card that gives you instant access to your money if you ever need it, eliminating the liquidity issue.

Cant believe you are recommending Cap1, when there are MUCH higher savings accounts there...

Eloan.com 5.5%
Presidential 5.25%
Emigrant 5.05%
HSBC 5.05%
Citibank eSavings 5.00%

There's a reason I recommended Capital One. First, I recommended it from personal experience. I go through them, and I've found them to be great. No problems at all. Second, on Bankrate's rating page, Capital One is the first bank listed that has a 5 star rating. Of course there are online banks that are offering higher interest rates, but when you take everything into consideration, I find that Capital One is the best. Just my personal opinion.

PSECU, for those of you fellow savers who live in PA, offers a 5.00% money market account. Money is instantly available for you to spend, no waiting 3 business days for your money. Obviously, you have to transfer it to your checking account to withdrawl or write a check, but with PSECU's online banking, that can be done instantly. I keep all my money in my MM account, and when Ineed to make a purchase with my debit card I just move whatever I need from my MM to checking before I leave my house. Slightly higher interest rate, money is available instantly, slightly better IMO.

DH

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