Low interest rates may be terrific for people who are taking out a mortgage. For diligent savers, though, rock-bottom rates aren’t so great. In fact right now, average rates for the nation’s savings accounts are below a paltry 1 percent.
But that doesn’t mean you shouldn’t do your homework, and seek out the best possible deal for your money. Over time, even tiny differences in what banks are offering you can add up to a whole lot of much-needed cash.
Check out the highest savings-account rates in the nation, for instance, at popular consumer information site Bankrate. Or you can test out one of the many sites like Mint that enable you to compare and contrast savings accounts.
If you know you won’t need access to your money for at least six months or more, Certificates of Deposit (CDs) can be a good option. Different from a savings account, a CD will lock in your money for a set period of time, and knock you with penalties if you have to withdraw it early. Savings accounts, on the other hand, offer the flexibility of being able to shift your money to another bank at any time.
All savings accounts are not created equal, though, so always check the fine print before you sign up. Make sure the bank is FDIC-insured, especially in an era when many financial institutions have failed. Some accounts require a high minimum balance to qualify for their best rate, either at opening or for the duration of the account. Some have regular monthly fees, and others have rates that drop off precipitously after an introductory period.
Beyond banks, keep in mind any organizations you may be a part of. Costco or AAA members, for instance, may be offered higher-than-normal interest rates through those groups. Also make sure a straight savings account is really what you need: If you’re going to need occasional access to other services like online bill pay, then you may need to look into checking accounts instead.