Trying to save money for a future purpose is not as easy today as it once was. Banks are much slower to lend money or give much interest on your money. The good news is that not all banks give the same amount of interest, which means that some have higher interest rates for a savings account than other ones.
Banks are also constantly changing their savings account interest rates. A bank that once had excellent interest rates may not always have the best rates. After a while, you may find that other banks offer better rates, or they may have some new features or requirements that would make switching banks worthwhile.
When you decide to go shopping for a bank with excellent interest rates for savings accounts, Forbes mentions that all the best rates are being given by online banks. The reason for this is because an online bank does not have the typical overhead costs that traditional banks face. At present, the top online bank offering the best interest rate is the Ally Bank.
Getting better interest rates from another bank does not necessarily mean that you have to change banks. By opening a savings account with an online bank, you can simply transfer money between the accounts from the two banks when needed. Some online banks, says NerdWallet.com, will let you link your online account with an unlimited number of accounts at other banks.
Some websites are available which show comparative rates at many of the more popular banks. This lets you see in an instant who has the highest savings account interest rate around, as well as some of the terms that may apply. Terms may involve minimum amounts needed to open an account – which is often just one dollar, whether or not there are any special maintenance fees or minimum balances required, and if the bank is FDIC insured.
Many online banks that offer a savings account also provide customers with the ability to make direct deposits. Transfers can also be made easily to and from your regular bank account, but it will often take four to five days to complete the transaction. Access to your account information is usually 24/7, enabling you to keep an eye on your money at all times – from anywhere.
A bank may also let you divide the money into various sub accounts where the money is designated with names you choose, such as “Vacation Fund,” or “Christmas Account.” The CapitalOne online bank permits this, which used to be the ING Direct online bank.
When a savings account is associated with an online bank, it will usually have to remain connected to an existing bank account. It is often through the existing account that money is transferred to and from the online savings account. Some online banks have a feature that enables you to use your iPhone’s camera to make eCheck Deposits.
Finding a savings account with better rates can be found rather easily. The truth, however, is that interest rates are currently very low and will probably remain low for a while. Often types of bank accounts will yield greater results.