The Best FDIC insured High Interest Saving Accounts with Good Yields
[Updated May 1st 2009] With savings rates (APY) falling due to sharp cuts in the federal fund rates - nearing 0% - it is getting harder and harder for people to earn a decent risk-free return on cash sitting in savings accounts. According to Bankrate.com, the average savings account rate has fallen below 0.25%. What's more, many of those once high flying internet only banks offering 8%+ APY's have gone broke, leaving only handful of banks providing above average rates. When it comes to choosing a good high interest savings account, the first thing you must make sure is that it is FDIC insured ($250,000 limit for saving accounts), charges no account keeping fees and is well capitalized/established. If the savings account meet's these mandatory criteria, the next key factors to look at are the savings rate (APY), user experience/interface and finally convenience (which includes good customer service). With all these criteria in mind, here are my recommended high interest rate accounts: HSBC has historically offered a significantly higher APY than most of its competitors, has no additional fees and no minimum to get its top rates. But what made me choose HSBC a while back was it's global backing (it is the world's largest bank) and physical branch access. This can be useful for folks who prefer to deal with issues face to face, get cash out faster or who deposit a lot of checks.
ING Direct has a very simple and easy to use interface, which along with its strong brand makes it amongst the most popular accounts in the market place. The new electric orange account combines their competitive APY offering along with checking and ATM features that put in direct competition with the established banks, that offer little or no interest on their checking accounts. If you want a steady and simple high interest account, then ING Direct is the one for you.
ETRADE, not only offers a very competitive brokerage service, but also a top notch savings account with a straight forward multi-function user interface. Having a combined savings, brokerage and IRA account also make things very easy to manage from an administrative standpoint. This savings account is great for those who want a one-stop shop for all their financial activities.
Conclusion: I currently have my cash and emergency savings across a number of accounts, with the above being the ones I like best. With saving interest rates falling rapidly, seeking out the best yield is something I am constantly doing to maximize my returns. As rates (APY's) change and better offers come up, I will update this post and you can keep up by subscribing via Email or RSS to get the latest articles delivered direct.
Related:
~ 10 ways to Quickly Improve Cash Flow and Create Passive Investment Income
~ The A to Z of good personal finance
~ FDIC Going Broke and Why Bank Fees will Keep Rising
~ Before Buying Stocks: Your Pre-Investing Checklist
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January 3, 2009 5:22 AM
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January 6, 2009 6:28 PM
Do you recommend ETrade Savings Bank?
January 28, 2009 9:20 PM
I keep my "prudent reserve" in FNBO which earns 2.8% regardless of your balance.
January 28, 2009 9:36 PM
E-Trade has a good rate - 3%, but read the fine print - "The APY of the Complete Savings Account as of 1/20/2009 is more than 8 times the national average APY for savings accounts with balances of $25,000."
You need ot put 25K (compared to 10K in WT Direct). That's alot of money.
Sarah - I have been reading about FNBO and Emigrant as well, good rates (similar to WT direct). Will check them out in more detail, but I have had a great experience with WT direct so far. I signed up using their winter $250 bonus promotion, which is hard to beat.
March 11, 2009 4:44 PM
ING electic orange used to be pretty decent, now below 2%, need to start shopping around I guess.
August 29, 2009 1:41 AM
From the option my favorites are ING orange savings and etrade. ING is ideal for setting up an emergency fund. It offers high yield interest and easily accessible in times of emergency. Etrade on the other hand is suitable for investors because it provides a single platform to manage all their financial activities. I have recently joined etrade and it helped me kick start my investments.
September 11, 2009 8:39 PM
HSBC is great - much better than ING in terms of rate. Though Ally bank has been offering a great rate of late. As HSBC and ING get bigger, their rates get worse!