The effects of the ongoing great recession have created issues for Americans in so many ways. As interest rates on borrowing fell to incredible lows, secure interest earning products took a major hit.
Money market, time deposit and passbook savings account rates fell so far that the rates they offer have become negligible.
Some people may feel these types of accounts have outlived their usefulness. The reality is that these types of accounts can still play a vital role is a person’s investment portfolio.
While the stock market has skyrocketed to all-time highs, everyone knows that stock investments don’t just keep going up, at least in the short-term.
Somewhere down the line, a correction is going to rear its head. That reality creates a risky environment for investment.
Now might be a good time for investors, big and small, to consider seeking refuge in secure investments for a portion of their portfolio.
What Are the Benefits of High Yield Savings Accounts?
Investments don’t get anymore secure than savings accounts. As long as the balance ($100,000 or less) is insured by the FDIC, the money will always be there.
In a risky environment, it is always better to earn next to nothing in a savings account than it is to watch an entire investment portfolio go through a 10%-15% correction over the near-term.
It becomes a good time for wise investors to not put too much emphasis on savings account interest rates.
Finally, savings account are very liquid. They make great emergency accounts for people to set aside money that is easy to get when they need it with no early withdraw penalties or hassles.
Where Can People Find The Best Savings Account Rate?
The banking industry has become very competitive in recent years. The internet has essentially erased state lines allowing anyone located anywhere to have access to any bank through online banking sites.
If people do the proper due diligence, they should have very few problems locating financial institutions that offer a relatively high interest savings account while offering the financial security people expect from their financial institution.
Based on that criteria, here are some of the financial institutions currently offering the best savings account rate plus value added benefits such as no transaction fees:
- Ally Bank – 0.87% APY with no minimum deposit required. Voted “Best Online Bank” by Money Magazine for 2011-2013
- Synchrony Bank – 0.95 APY with no minimum balance requirement and no transaction fees
- GE Capital Bank – .0.90% APY with no minimum balance requirement up to a maximum of $1M
- EverBank – 1.01% APY with minimum deposit requirement of $1,500. The account also gives a 1.40% bonus for the first six months up to the first $50,000
- Quorum Federal Credit Union – 1.05% with no minimum requirement and no maximum limit
- Ultima Bank – 2.02% APY. The account is reserved for individuals 18 years-of=age or younger. Withdraws prior to 18th birthday are subject to early-withdraw penalties
- Barclays Online Savings Bank – 0.90% APY with no minimum or maximum requirements. Great name recognition
- Discover Bank – 0.85% APY with a $500 minimum deposit requirement, no maximum
All of these banks are FDIC insured. It doesn’t take long to notice that all of the large conglomerate national banks are missing from this list. Most of them are currently offering 0.01% APY with possible transaction fees and minimum deposit requirements.
If liquidity is not important, investors can earn a slightly higher yield by investing in money market accounts or certificates of deposits that are available through many of these same financial institutions.