How great would it be if you could get a better return on your savings? What if you could get a rate 300 times higher? Of course that’d be great! Who doesn’t want more money?

But if you just opened a money market account with the local big bank branch, or you signed up for a credit card to get the free T-shirt, you might be leaving money on the table or paying sky-high fees. And even if your account was the best available at the time, product offerings change so often, it’s hard to keep up!

So the editors at Kiplinger kept up on it for you, thoroughly researching the 2012 best and worst banking and credit options for consumers. I recently spoke with associate editor Lisa Gerstner about the financial products that made this year’s nice list, and which ones to avoid like re-gifted fruitcake.

Savings and checking

Is it even possible to get a savings account with a decent interest rate these days? Well, that depends on your definition of decent… But although rates are dismal, some savings and checking products clearly outperform others when it comes to boosting your bottom line.

Money market accounts

“When we looked for the best money market accounts, we wanted somewhere we could leave money and forget it, without worrying about fees and minimum transaction requirements,” says Lisa.

The winner? The Sallie Mae Money Market account, which pays 1.05 percent, a “decent rate right now,” says Lisa. There’s also no monthly maintenance fee and no minimum-balance requirement.

The one to avoid? The Fidelity Tax-Free Money Market, with its sad 0.01 percent interest rate. “You really can’t get worse than that,” says Lisa.

Interest checking accounts

Another way to earn interest is with an interest checking account, although you have to be willing to jump through some hoops.

“If you want a really good rate on an interest checking account, you have to stay on top of things,” says Lisa. “They typically require three or four different types of transactions to qualify for the rate.”

This year, the Lake Michigan Credit Union’s (LMCU) Max Checking account topped the Kiplinger list. At 3 percent interest on balances of up to $15,000, “it had the highest rate I could find,” says Lisa. Although it’s a credit union, anyone in the U.S. can join.

But as with any interest checking account, you have to meet a few requirements to earn the rate, such as making one direct deposit and 10 debit card purchases each month. There are no monthly fees or minimum-balance requirements, and LMCU refunds up to $15 a month in surcharges if you use ATMs outside their network.

“People should also check out their local credit union to see if they’re offering an even better interest checking account,” says Lisa.

So who came dead last in the interest checking category? It was Chase’s Premier account, which pays just 0.01 percent. “Most big banks aren’t going to give much for interest checking,” says Lisa. They’re also going to charge some hefty fees. Chase Premier charges $25 per month in “maintenance fees” if you don’t meet their transaction or minimum-balance requirements.

Online banks

Online banks usually offer the best rates, thanks to lower overhead.

Lisa says the top pick is Ally Bank, which pays 0.4 percent or 0.75 percent for checking, depending on your balance, and 0.95 percent for savings and money market accounts. “The interest rates are competitive, they refund ATM fees, and they don’t charge other fees or require minimum balances,” says Lisa. Ally is also rolling out remote check deposit this year, which Lisa says is “important if you’re using an online bank because you can’t cash checks locally.”

Lisa’s least favorite online bank is Ascencia. “It’s not bad for banks overall, but the $29 overdraft is really high and their rates aren’t very good compared with other online banks,” says Lisa. Ascencia pays 0.22 percent for checking, 0.32 percent for savings and 0.22 percent to 0.53 percent for money market accounts.

Credit cards

Many cards look great, but unless you pay attention, you could get slammed with unexpected fees.

Prepaid cards

“Prepaid cards are tricky,” says Lisa. “Many are fraught with fees, and you may not realize they’re there until after you’ve bought the card.”

So which card was the most consumer-friendly?

“Right as we were going to press, the Newcomer Bluebird Prepaid card from Walmart and American Express came out,” says Lisa. With no activation or monthly maintenance fees, online bill pay, and an app that lets you deposit checks, it was the clear winner. Lisa also likes that you can set individual spending limits for up to four users and make fee-free withdrawals at 22,000 ATMs (only with direct payroll deposit).

Lisa’s pick for the worst prepaid card was the Magic Prepaid MasterCard. Endorsed by basketball giant Magic Johnson, the card comes with some sizable charges: $4.95 to activate the card and a $4.95 monthly fee.

“We haven’t come across any celebrity-endorsed cards that we’d recommend,” says Lisa.

Rewards credit cards

When choosing a rewards card, look for the card that gives back the most, whether it’s in points or cash. But read the fine print, as some rewards cards turn out to be quite unrewarding. “You have to watch out for expiration dates and caps on points,” says Lisa. “It’s also great if you can avoid an annual fee, but if you do pay one, make sure you’re getting your money’s worth in rewards.”

This year the rewards card that offered the most bang for your buck was the Chase Sapphire Preferred card, which offers you two points per dollar on travel and dining and one point per dollar on other purchases.

Points can be redeemed for cash, merchandise, gift cards and travel perks. They offer a $0 introductory annual fee for the first year, after that $95, and “you get a nice chunk of points when you sign up,” says Lisa. Chase Sapphire Preferred currently offers 40,000 bonus points after you spend $3,000 in the first three months from account opening.

A far less rewarding card was the Capital One Sony card. “The five-points-per-dollar sounds great, but that’s only if you buy Sony products,” says Lisa. “You also have to submit a form if you buy those Sony products anywhere except a Sony store. It’s just not convenient.” The card also offers three points on dining out at restaurants and movies and one point for all other purchases.

Cash-back credit cards

Which card puts the most cash back in your wallet?

Lisa’s pick is the Blue Cash Preferred Card from American Express, which offers 6 percent cash back on groceries purchased at US supermarkets up to $6,000 per year in purchases; 3 percent cash back on gasoline purchased at US gas stations; 3 percent cash back on purchases at select US department stores, and 1 percent cash back on other purchases. Terms and limitations apply. Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit. Terms and Restrictions Apply.

“With more food price inflation predicted for 2013, getting 6 percent back on groceries is pretty big,” she says. Although there is a $75 annual fee, the cash back you can earn using this card to pay for gas and groceries should more than cover the fee.

The worst in the cash-back category was the Discover Motiva. Editor’s Note: This limited-time offer has expired.

“You should be able to get at least 1 percent back with a cash-back card, but the Discover Motiva only pays 0.25 percent on annual spending up to $3,000 and 1 percent after that,” says Lisa. “And although you do get an extra 5 percent back on interest charges, we don’t recommend you carry a balance in the first place.”

To see which other products made Kiplinger’s list, check out the full article, Hits and Misses of 2012.

GRS is committed to helping our readers save and achieve your financial goals.Savings interest rates may be low, but that’s all the more reason to shop for the best rate.Find the highest savings interest rate from Ally Bank, Capital One 360, Everbank, and more.

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