Many people are underwhelmed by the rates they earn through savings accounts. Luckily, you can follow a few easy tips to maximize your savings rates and earn more money.
The Difference between Bricks and Mortar and Online Accounts is that account holders only gain between 0.2 and 0.5 percent yield on their standard savings accounts. Many people opt for money market accounts to increase their money market rates. However, money markets only offer nominally higher interest rates.
It’s possible to earn better rates by putting your money into online savings accounts or online money market accounts. Some online providers will offer interest rates between 2 and 4 percent. These rates can strongly outcompete the traditional rates offered by banks.
Just follow some easy tips to raise those interest rates and earn better savings rates.
6 Tips to Finding Stronger Interest Rates
1. Find a good database of rates.
Bankrate.com offers a variety of rates for your perusal. Here, you can find a modicum of both brick and mortar and online rates. Click the ‘Compare Rates’ link. Then, select ‘Checking and Savings.’ You’ll be able to narrow down your search and look for Money Market Accounts here as well. Continue to select Money Market Accounts and Savings Accounts as you browse the site. Eventually, you’ll find some very impressive yields.
2. Only invest with a well-regulated institution.
Always investigate an institution before you invest. Some of these institutions will offer unusually high rates to entice customers. The “Safe and Sound” rating will clearly display that bank’s safety rating. Remember, only invest with banks that have a high safety rating. The scale usually runs from 1 to 5. 5 being superior, so you should stay far away from banks with low safety ratings.
3. Only invest with institutions that offer government-backed insurance.
You need to make sure that your accounts are insured by the Federal Deposit Insurance Corp. or FDIC. Most credit unions are also insured by the National Credit Union Share Insurance Fund or NCUSIF. Normally, up to $100,000 of your funds will be insured by the government.
4. Do not be fooled by fake banks.
Some identity thieves and scammers will set up sites that look exactly like that of another bank. Inspect the website carefully and call any phone numbers available just to be safe.
5. Link up to your checking account.
People who open online money market accounts or online savings accounts should link their new online account to a pre-existing checking account. This makes it easy for you to transfer money between the two accounts.
6.Choose great rates, but don’t be anal-retentive about one-tenth of a percent here or there.
You won’t see much of a difference if one yield offers .01 percent higher interest than a different yield. It is important to get a rate that will beat the rate of inflation. Also, don’t be enticed by a high teaser rate that will sink in a few months.
Be diligent about interest rates. All of these basic tips can help you find savings rates that will promote financial growth. Always be on the lookout for the best rates. It takes some research, but you’ll be glad you did the legwork before you invest.
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