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We’re often asked about the best place to put emergency or reserve savings money. While brick & mortar banks provide a certain level of convenience and access, the earned interest rate is often lower than online savings accounts. We thought we’d give you a snapshot review of different options.
Gone are the days when Wells Fargo, Chase, and Bank of America are dominating the savings account world. In the past decade, online savings accounts have started to provide a tremendous alternate source for earning the best interest on your money.
Sources like Capital One, Ally Bank, and CIT Bank are all providing much higher savings rates than brick & mortar banks…and generally with no account fees.
Each has different benefits, terms, rates, minimums, etc. You’ll also want to decide on your liquidity needs. For those who need access to their funds at the drop of a hat, you’ll want to look at regular savings accounts and how quickly your institution can transfer the funds. Many of these online accounts can take a couple days to get money into your main checking account.
You may also want to consider CD’s, as rates have started to climb recently. Just be careful about locking your money up for too long into an account with no liquidity. Life changes quickly, and so do the demands on your money.
As of this article publication, CIT Bank is offering 2.45% for regular online savings accounts. And Capital One is offering a 2.7% rate on one-year CD’s. These are the best terms we’ve found for online savings accounts and CD’s at well-known, reputable online banks.
Let us know if you have questions regarding different online bank account considerations…we’re happy to help!