The best place to keep your extra cash for short term needs is in a high interest savings account or money market account. If you don’t need immediate access to your savings, you may find it better to open a Certificate of Deposit, or CD.
CD’s generally offer higher interest rates than savings accounts. However, they lock up money for a fixed time period. They are, perhaps, best used when you know you won’t need the funds right away. An example is college savings when your child is only two or three years away from starting classes.
Online Savings Account and Money Market Interest Rates
In general, online savings accounts and money market accounts offer higher interest rates than standard savings accounts. The table below compares some savings account interest rates. It is worth considering one of the top military banks or a financial institution with a national presence such as Chase Bank.
When comparing accounts, look at the interest rate, fees, minimum deposits and other features offered.
Use this chart to find the best interest rates for your needs:
How to Open an Online Savings Account
Opening a savings account online is easy. Simply visit the bank’s website and begin the online application process. It takes about 15 minutes, depending on the institution.
You will need to initiate a funds transfer. Most online banks allow doing this electronically when setting up your account. Many also allow you to send a check or wire money.
The easiest method is with an Automated Clearing Housing (ACH) transfer, which is fast and free and takes about two to three days to put money in a new account.
What to look for. The most important things to consider when opening a new savings account:
- FDIC coverage. The Federal Deposit Insurance Corporation protects your deposits against bank failure, up to $250,000 per account. All banks listed on this website are FDIC-insured.
- No fees. Online banking should be free and easy. Be sure to look for account minimums and other fees.
- High interest rates. Compare terms before opening any account. Keep in mind the highest interest rates are not always the best. You also want an account that is free, easy to use and has the features you need.
Find interest rates for CDs with this link.