Earn Even More Income With a High-Interest, High-Yield Savings Account Online
It’s time to admit it: A standard savings account just isn’t what it used to be. And traditional brick-and-mortar banks know it! There’s a good chance you’re getting the short end of the stick in today’s market — maybe even ripped off. But why settle for the tiny interest rate of yesterday when you can find more than twenty times the average online? Banks that do business there tend to pay higher interest rates, but consumers haven’t gotten the memo!
THE NUMBERS
In 2019, a survey revealed that the national interest rate for a savings account was just 0.06% on average. Why was that number so tiny? There are two important reasons: First big-name banks typically offered far lower rates, often even 0.01%. Next, the opposite story of online banks offering high rates make that national average skewed. It might even be accurate to say that it’s artificially inflated! A close look at online accounts revealed the more complicated story: In recent years, the national average was roughly 2.0%. Some institutions offered as high as 2.5%. Quite a few stayed in the area of 2.35%. But what does that mean, in plain math? For clarity, $10,000 sitting in a bank account with the old 0.01% interest rate meant a few cents in earnings that year. Online, a 2.30% interest rate would mean around $230 in the same timeframe. It’s hard to argue with the recommendation to change banks, when things are put in those terms!
RESEARCHING ONLINE SAVINGS ACCOUNTS
Online savings accounts have actually come pretty far in recent years. Now, with exploding options, it’s important to do the proper research before committing to a new place. Everyone has unique money goals, no doubt — but a few general questions are a necessity for all customers. Searching for a high-interest savings account online turns up a lot of variety in terms of service. Account minimums generally range from $0 to $2,000. To get the best rate of return, it’s important to know the minimum balance required at the bank. Some offer tiered interest rate structures, meaning the more you keep in your account, the higher the rate you receive. And what about fees? Some online banks advertise a policy of no fees, no matter what. SOme make the claim that there are no fees only with a specific minimum balance or a minimum number of transactions. It really depends, so read up! And what about customer service? If you’re using an online option with no physical branch access, it’s pretty important to check out this policy. Can you access a customer care rep when you need to? Are they actually responsive to account requests? Customer digital experience is another issue to look into. Does the mobile version have check deposit features? Is it difficult to use?
SAFETY FIRST!
Safety is always a concern, of course. To make sure the online institution is legit, make sure to check if it is insured by the Federal Deposit Insurance Corporation (FDIC). This means that in the event of a bank failure, there is a significant insurance policy on each customer. For credit unions, the equivalent organization is the National Credit Union Administration (NCUA). Almost all online banks offer access to your funds with a regular ATM and debit card, on the go. Sometimes there are ATM fees, but sometimes there are not. A smaller number of online banks do not offer ATM cards, so that’s important to know ahead of time. Researching the pros and cons is a first step for any new customer. And as one might expect, account information is always online. It’s not hard to find out about your account, that way! WIth mobile apps for the phone the ability to deposit checks electronically, there’s a lot going on outside of the traditional bank buildin’s walls. Why stay, these days? A smarter investment is just a click away!