A checking account is great for everyday banking transactions. However, the interest paid on most checking accounts is abysmal. Start saving money and gradually increase savings online in an insured high yield saving account.
Make a goal to set aside a certain amount each month to pad your checking account in case of emergency, then deposit additional funds into savings. Or, use an automatic savings program to stay motivated.
What to Ask in Person or Look For Online When Comparing Accounts
Investigate at least three or four banks about savings online. Account types may have different rules and restrictions. Ask each bank or trust about the following:
- Account access- are updates available by mail, phone, or online 24 hours a day?
- Automatic savings program options
- Minimum deposit required to open the account
- Minimum balance required to keep the account active
- Monthly maintenance fees
- Penalties or restrictions for withdrawals
- Registration with the CDIC (Canada) or FDIC (USA).
Increase Savings- Online Savings Accounts Often Offer Better Interest Rates
Banks like ING Direct operate solely online. They pay less overhead to operate and can often offer a higher yield saving account. Currently, their Orange Savings Account offer 1.30% Annual Percentage Yield (effective 09/09/2009). Transfers between the Orange savings account and a linked ING Checking account are free. There are no fees and no minimum balances required.
In Canada, ING Direct's Investment Savings Account currently pays 1.05% annual interest.
Open an Account Online and Get Best Savings Interest Rates in Minutes
Ally Banks offers one of the more competitive interest rates available today, at 1.7% annual percentage yield. Other features include no transaction fees, no minimum monthly balances, and daily compounding interest. Ally Bank is a member of the FDIC.
Opening a new savings account online takes between 10 and 15 minutes. Customers can also call 1-877-247-ALLY (2559) 24 hours a day, 7 days a week to get started or for customer support.
High Interest Savings Account Online Access and Convenience with HSBC Direct
HSBC Direct requires only a $1 deposit to get started. There are no monthly fees or minimum balance requirements. Clients do not need a checking about with HSBC Direct to open a high yield saving account, with 1.35% interest APY.
Learn More About Online Banking and Saving Money
To learn more about banking transactions and security online, see Online Banking: Easily Pay Bills, Manage Savings and More with Online Bank Accounts.
For other guaranteed savings strategies with higher rates of return than those offered by savings accounts, see the Quick Reference Guide to GICs to learn more about Guaranteed Investment Certificates and Bonds.
Note: All interest rates quoted current as of October 25, 2009.
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