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 do lock up your money for a fixed time period. So they are best used when you know you won’t need the funds right away. A good example is college savings when your child is only 2 or 3 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 many standard savings accounts. Online banks are often able to streamline costs by not having the overhead from many brick and mortar locations.
The table below automatically compares some of the best savings account interest rates on a local, regional, and national level. It is worth considering one of the top military banks, or a bank with a national presence, such as Chase Bank.
When comparing these accounts, be sure to look at the interest rate, fees, minimum deposits, and other features they may offer.
Use this chart to find the best interest rates for your needs:
How to Open a New Online Savings Account
Opening a savings account online is easy. Simply visit the bank and begin the online application process. It takes about 15 minutes with each bank, depending on the institution. You will also need to initiate a funds transfer. Most online banks allow you to do this electronically when you set up your account, and many also allow you to send in a check or wire money. The easiest method is with an ACH transfer, which is fast and free. It should take you approximately 2 or 3 days to fund your new account.
What to look for. Here are the most important things to look for 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 site 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. These accounts are all among the highest in the nation. Be sure to compare before opening an account. Keep in mind the highest interest rate isn’t always the best. You also want an account that is free, easy to use, and has the features you need.
Find interest rates for Certificates of Deposit. Use this link to find the best interest rates for certificates of deposit (CDs) in the US.