Do you have a typical savings account that yields 0.25% interest? Or, maybe you have a checking account that actually costs you money each month! Wouldn’t it be nice if the bank would pay you a decent interest rate for borrowing your money? Guess what, they’re out there, you just have to take the time to find them!
Online Savings Accounts
The absolute easiest way to find a high yield savings account is to take your search online! I just performed a quick search myself and it took me about 2 seconds to find out that Ally Bank is offering 0.89% for their members! If you’re currently earning 0.25% interest at your bank, do you realize that the rate of 0.89% is 3.5 times greater of a return. Plus, they compound the interest rate daily, not monthly! The switch would be pretty painless, and I’ve heard great things about Ally.
Your Local Credit Union
It might be worth it to check the current rates at your local credit union as well. Many of them offer “reward checking accounts” that pay up to 4% in interest on your checking account balance!
I have a credit union in my hometown that pays 3% interest on a $15,000 checking account, and I’ve definitely been taking advantage of it! What’s that? You want to know what the catch is? There really isn’t one. All I have to do is check my online account at least 4 times a month, and make sure to swipe my debit card 10 times in that same month. That’s it. By doing these two things, I could earn up to $450 each year just for having some money in the bank. Not a bad deal, huh?
How Do They Do It?
With the economy in such a bad state currently, how in the world can the banks afford to pay 3% interest on your savings? Well, it’s quite simple really.
First of all, not everyone is going to meet the requirements every month. Maybe they’re too used to swiping their credit card, or they never check their account online. If that’s the case, then they earn 0% on their savings. So, in actuality, the bank is probably paying out much less than 3% overall after you factor out all of the people that don’t qualify each month.
Second, since the credit unions have teamed up with either of the plastic card kings (MasterCard or Visa) for those debit cards, they get a cut of every one of your purchases. With all of their members, this could easily add up to hundreds of thousands of transactions every month, and their total cut can get quite large!
Have you looked into a high-yield bank account? If not, you are leaving some serious money on the table!