High Interest Savings Account
A high interest savings account is attainable by conducting a lot of research and making financial institutions compete for the business. Paying attention to the interest earned is not the only detail worthy of attention. Overdraft fees, minimum balance fees, and balance transfer charges should be taken into consideration as well. Other avenues for investment should also be considered depending on the need for the funds on an immediate basis. Some types of funds offer greater return due to the commitment required by the bank.
In general, credit unions offer more perks such as no-fees, no minimum balances, and more personal attention given to each client. They can offer these perks because they are not owned by big business and generally pay locally for services. These differences allow for lower fess and higher interest rates offered to members. The downside to working with a credit union for a high interest savings account is that if a person travels they may have a hard time finding branches in order to access funds. This problem resolves itself by individual credit unions teaming together in a co-op, but make certain the considered institution participates. Even with the best online savings account a person wants to make sure accessibility and customer service is readily available. A person may think the funds are not required for use, however emergencies come up and even if a high interest rate is earned it means nothing if the funds are inaccessible.
CDs and money market accounts will always offer more than even a high interest savings account. This is generally due to the longer commitment and higher minimum set on these accounts. The more money in a high interest savings account the higher the rate of return earned. Though these accounts offer a better return, they have more restrictions such as the amount of withdrawals per month, even for the best online savings account. Evaluating all the terms including the amount required for what type of interest rate leads to the best decision. It is bad to assume if the rate is high to begin with that it will increase just as fast. Sometimes the better option is to start with a lower rate that increases more often and at a steady rate. This decision all depends on the realistic growth of the funds. "Receive my instruction, and not silver; and knowledge rather than choice gold." (Proverbs 8:10) Knowing all the options possible leads to a better decision based on the available and future funds.
Starting money in a traditional savings account allows the consumer to build their funds to the required amount. Even if a person does not have specific plans for savings goals, putting their money in the appropriate high interest savings account leads to better success in the end. Putting money in an account which requires a high minimum balance just to get a higher rate of return leads to fees for not meeting the minimum balance which is usually a lot higher than the potential interest earned. Starting with the highest interest possible for the amount of money currently collected for the account starts the consumer out on the right foot. Understanding what the options are once certain amounts are acquired within the current institution leads to better planning. With future information in hand, a consumer may choose an institution that offers an initially lower rate for the best online savings account, but offers better benefits once the account grows. This saves the hassle of having to change banks, which may cost money as a balance transfer.
All banks and most other financial institutions are FDIC insured, which means that if the national market does go into depression and money is lost, the money at insured institutions is safe. Other forms of insurance may be available for amounts greater than $100,000, but for a cost. Evaluating the risk of holding this much money in a bank rather than a sound investment may lead to purchasing stock or property which shows greater return. Investing in property is a good thing if the market shows promise in the future. In a buyer's market history proves the seller's market is around the corner so investment would be smart. Likewise, investing in a retirement home or vacation home puts most of the control in the homeowner's hands. The consumer cannot control interest rates on the best online savings account; however splitting the money between different types of funds creates a better possibility of financial success. "My fruit [is] better than gold, yea, than fine gold; and my revenue than choice silver." (Proverbs 8:19) The first choice or the initial 'best' choice may not be the long-term solution.
Doing multiple business with the same institution promises better rates than a single account, not to mention makes personal book keeping easier. Searching for the best online savings account can be confusing as well as overwhelming. Concentrate on finding a business with a lot of credentials such as listing with the BBB, Chamber of Commerce, and knowing how many years each one has been in business. In most cases rates will be better online, however availability of customer service for simple questions or major transaction may be difficult to find. Depending on the intended use of the funds, these details may not matter. Consulting a professional financial advisor as well as a spouse or other family member leads to better peace of mind and a more educated decision.
High Interest Bank AccountsWhen it comes to high interest bank accounts, some of the best returns are offered by money markets and long-term certificates of deposits. In an economic downturn, every penny counts and consumers cannot afford to invest hard earned cash into vehicles that don't earn the highest interest possible. At an average rate of a little over one percent, regular passbook savings just can't cut it; but financial institutions offer several options for better yields. A bank money market or CD can pay off at a higher return than passbook savings. High-yield money markets may come with frills, such as free checks and debit cards, although withdrawal of funds may be subject to a specific schedule; and depositors may be required to maintain minimum balances.
Certificates of deposit are safe places to park cash if depositors have a little more time to save. Depositors may have to shop online for the best rates for the lowest minimum deposits, but the earnings are well worth the wait. Socking some money away in a CD is a hedge against recession; and individuals who can afford to let funds sit for several years in high interest bank accounts may realize 8 times the return of regular passbook savings. For larger deposits up to $10,000 and more, the yields can be quite considerable; but the drawback to CDs is that depositors need to exercise patience. Penalties for early withdrawal can take a considerable bite out of high yields; and earnings are tied to interest rate fluctuations.
And speaking of early withdrawal penalties, individuals planning for retirement should consider opening an Individual Retirement Account (IRA), for high-yield long-term savings. An IRA allows account holders to make tax-deferred deposits each year as long as funds are not withdrawn before depositors reach the age of 59 1/2. While wise men make provisions to save money via high interest bank accounts, wiser men also make provisions for the salvation of their souls. "I EXHORT, therefore, that, first of all, supplications, prayers, intercessions, and giving of thanks, be made for all men; For kings, and for all that are in authority; that we may lead a quiet and peaceable life in all godliness and honesty. For this is good and acceptable in the sight of God our Savior; Who will have all men to be saved, and to come unto the knowledge of the truth. For there is one God, and one mediator between God and men, the man Christ Jesus" (I Timothy 2:1-5).
Depositors should consider opening high-yield vehicles, such as money markets, CDs, and IRAs before sinking cash into regular low-yield passbook savings. Parents and grandparents can open long-term certificates of deposits for newborns and high school graduates to allow monies to effortlessly accumulate over the years and earn dividends towards a college fund. Windfall earnings can be added to existing interest-bearing accounts to supplement retirement funds or long-term health care expenses. Short-term savings, funds that are accessible within several months to one year, can also contribute towards socking money away for a down payment on a first home for newlyweds, a new car, or a dream vacation. Financial planners advise depositors of all ages to make the most of their money by saving early, even if the budget looks like putting money aside is impossible. By opening high interest bank accounts, instead of regular passbook savings, depositors can begin to implement sound strategies for a more stable fiscal future.
For depositors with a considerable amount of cash, another great high-yield instrument is the U.S. Treasury Bill. The "king" of low-risk investing, also known as the T-bill, these government-backed securities are offered at banks and brokers' offices for a transaction fee. Consumers can open high interest bank accounts with Treasury bill deposits which are one of the safest investments around. T-bills are considered highly secure because, like other Treasury bonds, they are fully backed by the United States government. Some U.S. Treasury bills mature anywhere from several months up to one year; and therefore make excellent short-term investments, especially for depositors who need ready access to high-yield funds. Ten-year Treasury bonds are great investments for individuals who are serious about saving money for the long haul. Other government-issued securities, such as Series EE bonds, are also good investments, as are government notes and bonds, which are exempt from state and municipal taxes.
As a rule of thumb: the higher the yield, the greater the risk. Investors who want to earn the highest returns should also be prepared to take a loss if interest rates drop or the value of stocks and bonds take a sharp dip. That's why high yield instruments that are independent upon market fluctuations are safer. Some financial planners suggest that account holders find high interest bank accounts by shopping away from home or online. With a little effort, a search on Internet banking sites might yield high interest bank accounts and certificates of deposit with low risks. Depositors should look for banks and financial institutions which guarantee deposits up to $100,000 through the FDIC.
For individuals and families who are undecided about what kinds of savings, bonds, bills, and other securities that make the best mix for high interest bank accounts, a local bank officer or financial planner can clear away the cobwebs. Saving for the future is highly subjective and no two depositors have the same fiscal needs. Exploring options with professional money managers and being determined to start and stick with a plan to start saving or investing is the best move toward financial independence. The key to earning the best returns on banking investments is to carefully consider all options, surf the Internet to compare the best rates, and make informed decisions to make every dollar count.