High Interest Accounts – Your Money Works Hard
Most of us do our banking at the local branch of a well known bank. That is great from a convenience point of view but not necessarily the best way to get the highest rate of return on your money. It’s great to be able to go in every week when you deposit your payroll check and shoot the breeze with the friendly teller but the bank incurs a lot of expenses by providing this service to you. The more overhead they have the less they can afford to pay you, and everyone else, in interest.
To get the high interest accounts you are looking for you may be better off to open an account online. This can seem like an uncomfortable prospect for many people. It just seems like you are turning your money over to strangers, but in reality if you go with some of the bigger online companies, your money is just as safe as it is at your local branch.
Since these online banks only have a fraction of the overhead as the local brick and mortar locations they can pass the savings onto their customers in the form of much higher interest rates. Obviously they still need employees and software, websites,etc. but the cost is still much less than it would be if they had to spend a million or so dollars to build a beautiful building and pay staff, electricity, lights, property taxes, etc. They save so you make more money.
Just do a search and find two or three online banks to place your money with. Compare their terms such as funds availability, interest rates, ease of making a deposit, etc. Once you’ve narrowed down the bank you want to go with, next you have to decide what type of account you want. Most of us have at least one checking and one savings account. And that’s a pretty good place to start. Having some fluid funds set aside for that proverbial rainy day is never a bad idea.
When you start saving more money you may want to transfer some of it into an even higher paying CD. Generally the longer period of time you agree to leave your money with the bank, the more interest you will earn. If you take your money out early you will pay… it’s not quite as dire as it sounds. You will most likely lose some of the interest that has accumulated. Check with the bank to find out exactly what the penalties are for early withdrawal.
It doesn’t matter if you choose checking, savings, CD, or any other type of high interest accounts, as long as your money is working for you 24/7.