What are the benefits of a high-yield savings account? It is important to save up for an emergency fund, a new car, or a new home. A high-yield savings account is a great idea if you are going to need this money in five years or less. The US government insures savings accounts in the amount of $250,000 or less. Plus, this is a great way to earn high interest. Accounts that you can open online, in particular, offer much better rates compared to those featured by conventional institutions.
One great option is the money market account from Nationwide Bank. It offers a 1.04 percent annual rate, and a minimum balance of five hundred dollars is required. The Ally Bank offers deposits at one percent annual interest and does not have a requirement for a minimum balance. A similar option is provided by ING Direct. ING Direct is best-known as the first “online only” bank, and the convenience offered this way helped them build a very stable client base. The Orange Savings Account featured by ING Direct goes with a variable 1 percent yield, no minimums, and no fees. Transfers are easy and free, as the account is electronically linked to your present checking account. You can rest assured that your deposits are FDIC-insured in the amount of up to $250,000 per depositor. The application process takes no more than 5 minutes.
One award-winning savings account is the FNBO Direct. It offers one of the best rates in the country. There is no minimum balance requirement. You can choose between a traditional and “modern” savings account. With the modern one, you enjoy added convenience. You can use a debit card and get the same interest rate as you would if you opted for the conventional variety. The current rate is 0.85 percent. An account can be opened with as little as one dollar. You can apply online, and it will take you just 5 to 10 minutes. You have to fill out personal details such as your Tax ID and Social Security number, as well as your ID card or driver’s license. You will have to give employment information, including your employer’s name, phone, and address. Finally, you should list any mortgages and loans you are currently paying off as to confirm your identity.
One aspect of high yield savings accounts is that the interest rates change often. Clearly, this can be construed as a pro or con depending on the situation. They change to stay level with the Federal Reserve rate or for market purposes. The rates change with the market. It is that simple. Thus, keep in mind that the bank with the best rate today may not always be the bank with the best rate tomorrow or in general.
Almost all of these accounts offer ATM use, but there is usually a fee for withdrawal. Not all of the banks offer checking accounts, however. ING is one financial institution that does. The checking account comes with a complimentary MasterCard Debit Card. Through this account, it is possible to send paper checks in the mail without having to bother with a checkbook.
How is it that the bank gives you free checking, on which you earn interest, to top it off? This is because of its online only status. It saves money on operating branches and issuing paper statements, and this money is directed back to the clients.
Never forget the key word where high yield accounts are concerned – namely, optimization. It should be as simple and easy to work with as possible. Again, ING is the big winner here – for now.
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