Comments on: Money Market and High-Yield Savings Accounts

By: TJ Jackson

TJ Jackson — Mon, 29 Jun 2009 02:24:57 +0000

Rates are unfortunately still falling. Be willing to move your funds to one of the best rate payers. Yeah, its a pain in the butt, but it helps keep competition alive……my bank is dropping to 2.0 on 7/1 and will lose my money

By: JP

JP — Sun, 28 Jun 2009 19:32:08 +0000

We talked about Ally a while back… they were GMAC, which obviously was not in the greatest financial condition. I’m more comfortable with FNBO or HSBC (both around 1.5%). The difference in interest is about $4 a month on $10,000… for me that’s not enough to justify going with Ally and worrying about them failing. Granted the account is FDIC insured, but I’d rather not have to deal with the FDIC - and find another bank in that situation - if I don’t have to.

That said, I am carefully watching rates right now. 1.50% is miserable - no better than the rate at my local credit union - so I’ll be leaving the online banking world altogether unless rates improve soon.

By: Dannyb

Dannyb — Sun, 28 Jun 2009 05:40:47 +0000

You guys are just so helpful, I can’t quit coming back with more questions lol XD. I’ve gotten all of my checking accounts in order and was about to open an online savings account to store away all my extra money to start accumulating interest. I was planning on going to Ally bank but when I went to sign up I noticed their rate at 1.98. they were at 2.25 and they keep going down. How do you guys feel about that and what would you recommend instead. I’ve searched and look up a lot of info but I just want to hear it from you guys as to what bank has an account with a good interest rate and is safe for my money. Thanks so much for all of your help so far

By: Aniruddha

Aniruddha — Tue, 23 Jun 2009 15:52:35 +0000

@Dannyb: I don’t think Numerica should smell fishy Danny

I use Credit Union National Association’s website when I am in doubt of a CU. Here’s the link to Numerica’s details: http://www.creditunion.coop/cu_locator/cu_detail.php?id=12112298

4.5% it is, this indeed is a great account, I haven’t looked at the condidtions though! Usually checking account with certain stipulations are offering such high rates these days, many of them are availabe only “locally” and this might be the reason Numerica is not listed among other nationally available high yields savings accounts. Also consider tracking http://bankdeals.blogspot.com/ for other local banking deals.

Let us know if you find any “nationally” available high rate. Happy Savings

By: DreaDrea

DreaDrea — Tue, 23 Jun 2009 15:52:21 +0000

Dannyb:
It is most likely a HIGH YIELD Checking Account your inlaws found, which require 10-12 debit or credit transactions a month and usually one direct deposit or ACH per month. Those type of accounts ARE 4% and up these days.
Those are now on another blog, but prior to the swtich, there is a PLETHORA of comments on them here, just do a CTRL F to do a search on this page…

By: Dannyb

Dannyb — Tue, 23 Jun 2009 15:40:01 +0000

So I’ve been doing a lot of research on high interest savings accounts and high interest rates and what I’ve come to find is they are generally around 2%. My girlfriends parents went to a credit union and are being offered 4.5% apy on a checking account? It’s with Numerica and I was wondering if you guys had any thoughts or comments on that? How come I’ve searched for “high yield savings account” or variants of that on Google and nothing above a 3% comes up, but they can find 4.5%. I just feel like there’s something fishy there and wanted your guys’ input. Thank you a lot

By: Aniruddha

Aniruddha — Tue, 23 Jun 2009 03:14:44 +0000

Amidst interest rates closing in, Ally’s No-Penalty CD might be a good alternative to your savings funds. It’s 2.15 at present, and being a CD this rate will be locked for the 9-month term. Being No-Penalty makes it no-problem to withdraw the money whenever a need arises. Jim’s post at Bargaineering throws more light on this: http://www.bargaineering.com/articles/ally-banks-no-penalty-cd-rate-arbitrage.html

By: Jackie S.

Jackie S. — Tue, 23 Jun 2009 03:06:10 +0000

Now that Evantage and Shore are both paying an anemic 2% I’ve opened up a fourth (sigh) account with Provident NJ. They’re guaranteed to keep their 3% for three months, so it’s a little bit like opening up a CD. And the minimum to open is just $50.

So far I much prefer their interface to either Shore or Evantage and have found them much smoother to work with.

Anybody found a CD of less than two years with 3% or more?

By: JP

JP — Tue, 23 Jun 2009 01:33:13 +0000

FNBO has lowered their rate to 1.50%. Depressing… this is the same as my local credit union, so there is now no benefit for me to move my money online.

By: Hanna

Hanna — Sat, 20 Jun 2009 18:23:37 +0000

I have a savings account with SmartyPig right now and up to now it was a 3 % APR but i just got this message today:

Effective June 22, 2009, the APY (annual percentage yield) on SmartyPig accounts will be 2.75%. This is an APR (annual percentage rate) of 2.72%. While interest rates have been trending lower, we believe this is still an extremely competitive yield for an account insured by the FDIC. Thank you for being a SmartyPig customer. We appreciate your business!

2.75% is still pretty good, but I wish I started one earlier…

By: frank

frank — Thu, 18 Jun 2009 18:56:49 +0000

i have had an account with s pig for several months. their rate has not changed.
the thing is, you have to play their game, as if you were trying to save for a future purchase (when you have reached the target amount). or, you have set up an account for the purpose of others contributing to your goal.
so, i deposited $1,000 and picked a fictitious amount as a goal, and have $33 taken out of my checing every month. you can withdraw at any time, but it has to be the whole thing. also, you can open up other accounts for separate deposits. when you reach your target amount, they send you all of it.
that is my understanding of how it works. it is still the best savings account rate around.

By: TJ Jackson

TJ Jackson — Thu, 18 Jun 2009 15:17:07 +0000

Read the following article and the comments that follow it

http://www.getrichslowly.org/blog/2008/08/19/smartypig-a-goal-oriented-savings-account/

It’s a different animal - pun intended - than the other savings accounts you mentioned. be sure you understand the differences (and there are a lot of them) before proceeding

My opinion - it is a less like a savings account and more like a CD that accepts (requires?) additional contributions.

By: M Alford

M Alford — Thu, 18 Jun 2009 02:53:08 +0000

Brad, thanks for the help!!!

By: Brad

Brad — Wed, 17 Jun 2009 18:08:45 +0000

@ M Alford:

We’ve been thru that at least once. As big as this blog is, just have your browser do a search for smarty or smartypig. Plenty discussion here already.

By: M Alford

M Alford — Wed, 17 Jun 2009 16:55:57 +0000

Can someone please tell me the good and bad about Smartypig? Kinda hard to beat the rate. Have had an account with Etrade, HSBC, and DSD. Am tired of “awarding” them with my money for lower (and constantly falling) rates.

By: TJ Jackson

TJ Jackson — Tue, 16 Jun 2009 14:29:50 +0000

RossB: I’m afraid that my only frame of reference is working and living here in the USA, so the only help I can offer is: call them and ask. I’m sure it has come up before, particularly with the well-established online banks like the two you mention here, so they should be able to give you the answers you’re looking for.

By: RossB

RossB — Tue, 16 Jun 2009 13:14:07 +0000

Hi everyone! I’m actually thinking of opening an online savings account either with HSBC or ING but I am working here in Riyadh and I’m not sure if the same rules, rates, issue about safety, etc. will apply to me. Banks here are not offering any savings account…only current accounts with 0 interest. Please help. Thanks.

By: Dannyb

Dannyb — Wed, 10 Jun 2009 14:48:46 +0000

Thank you very much and excuse my ignorance. That is completely ridiculous lol I don’t know why I thought that. Thank you for clearing that up for me. Yea I think i’m gonna check out ing or ally for my account

By: TJ Jackson

TJ Jackson — Wed, 10 Jun 2009 13:55:59 +0000

DannyB: No.

Read the following for a basic explanation: http://en.wikipedia.org/wiki/Compound_interest

If you were paid 20 dollars a month on 1000 dollars principal, thats basically 24 percent interest, and no legitimate organization is paying anything remotely like that on a savings account

If the quoted APY is 2%, and they are paying you interest every month (as most of them do) then you can expect to see about $1.70 a month in interest, for a total of around 20 dollars over the course of a year. This relatively low reward is why I strongly suggest that starting savers go for accounts where they pay you a bonus to open the account, as the bonus will often match or exceed what you could hope to earn all year long in interest at today’s rates.

Two examples:
http://bankdeals.blogspot.com/2009/06/75-bonus-for-opening-checking-account.html
http://bankdeals.blogspot.com/2009/06/ing-directs-25-savings-account-bonus.html

By: Dannyb

Dannyb — Wed, 10 Jun 2009 05:02:03 +0000

Thank you very much for your help. I’ve been browsing through the all of the posts and there is alot of good information. correct me if i’m wrong but I thought i was on a site a few nights ago that had an account that compounded the interest monthly. so 2% on 1000 as 20$ a month? Is it monthly or is it for the entire year?

By: TJ Jackson

TJ Jackson — Tue, 09 Jun 2009 18:38:04 +0000

Dannyb: go look at http://www.fatwallet.com/forums/finance/783099/m11499567/#m11499567

However

As has been brought up many times in these comments, the rate is not the only important thing to consider. For example: Everbank charges fees. DSD has a 1000$ minimum and when you withdraw your funds, you only get the interest paid up through the end of the previous month. HSBC has fairly poor safe and sound ratings. Some don’t allow a joint owner. Others have no online banking….or if they do, it can take a month or more to get set up.

etc, etc, etc.

Every institution and account has it’s “warts”. Check the bank and the account terms/conditions/features out fully before you make your choice.

I strongly advise going back a year (or more) on this topic’s comments and reading forward to get an idea of the experiences of others.

By: Dannyb

Dannyb — Tue, 09 Jun 2009 18:13:15 +0000

Wow this is amazing. just the site I was looking for that i can talk to people and discuss what mma or savings account I should go for. I’ve been searching online a lot and looking for the safest high interest rate mma or savings account and i wanted to get your guys thoughts and opinions on where I should go or point me in the right direct. I’ve been looking at ally bank and dollar savings direct but I wanna know if theres something better out there? Thank you

By: Aniruddha

Aniruddha — Sun, 07 Jun 2009 17:23:04 +0000

@Corry: You are correct, I tend to use MMA and High Yield Savings accounts loosely (my bad!). EverBank has Yield Pledge Money Market Account and the 3.01% is their bonus rate for the first three months and after that 2.00%. Few conditions you should know are minimum balance of $1500 to open a new account and minimum $5000 average daily balance.

By: Cory

Cory — Sun, 07 Jun 2009 16:40:29 +0000

@Aniruddha: Thanks for the heads-up.

I went over to EverBank and don’t see savings…just a MMA. Forgive my ignorance, but is that the same thing as a traditional savings? I didn’t think it was, but am open to being wrong about that. For instance, when they show their comparison, they compare it to Ally’s MMA @ 1.9%. But Ally has online savings @ 2.05%. So, different types of accounts? Interesting that they don’t offer a traditional online savings account…at least not one that I could find.

By: Brad

Brad — Sun, 07 Jun 2009 14:51:34 +0000

Clear Sky is still open to new accounts and is paying 2.05%. Easy folks to deal with and they’ve been great. Also, if you open a checking account for $1 with them, you will get an ATM card giving you easy access to savings and checking. They even reverse up to $20 in ATM fees a month. No fees or nasty rules…AND they did not take any stolen taxpayer dollars! (No Tarp funds.)
http://www.clearskyaccounts.com/