Everyday Cheapskate: Who Is Offering the Best Rates of Interest on Savings Accounts?
Dear Mary: Where can I earn the best interest on my savings? -- Sylvia
Dear Sylvia: This is a tough one, especially for those of us who remember when savings banks were paying respectable rates of 6% annual percentage yield and higher. Times have changed.
As I write, rates on traditional savings accounts, money market accounts and certificates of deposit are well below 1%.
Here are a few ideas for you to get the most you can in these difficult days:
The website SmartyPig, part of Sallie Mae bank, is offering totally free online savings accounts insured by the Federal Deposit Insurance Corporation with an annual percentage yield of up to 0.80%. It's a wonderful online piggy bank that not only keeps your money safe and available but also offers incentives to save for specific purposes. Check it out.
Online-only banks such as Ally and FNBO Direct are another option. Because these banks don't have the cost of physical locations and big staffs to run them, rates are likely to be slightly better than the big banks with physical locations. You need not worry about depositing your savings online. Provided the bank carries the logo certifying that it is fully FDIC-insured, you can rest easy.
Another option I suggest you look into would be an independent bank or credit union in your community, where you may be able to land a slightly better rate. Because credit unions are nonprofit organizations -- as opposed to banks, which are owned by shareholders -- credit union members benefit from more favorable rates and fees.
Credit unions often offer more creative options to get their members savings. Here's an example I just came across:
Blue Federal Credit Union is offering an accelerated savings account with 5% annual percentage yield on the first $1,000. That's quite amazing! Or open a new Christmas club account and you'll earn 1.25% on your deposits up to $5,000.
While it's appropriate that we should be earning interest on money we deposit into banks and credit unions, that's a secondary benefit. I am so proud of you that you are saving at all! Sadly, most people are not as disciplined.
Please remember that rates are always subject to change, so be sure to do your own due diligence.
Mary invites you to visit her at EverydayCheapskate.com, where this column is archived complete with links and resources for all recommended products and services. Mary invites questions and comments at https://www.everydaycheapskate.com/contact/, "Ask Mary." Tips can be submitted at tips.everydaycheapskate.com/. This column will answer questions of general interest, but letters cannot be answered individually. Mary Hunt is the founder of EverydayCheapskate.com, a frugal living blog, and the author of the book "Debt-Proof Living."Copyright 2021 Creators Syndicate Inc.