Jim, a reader of our Facebook page, shared some of his personal finance journey in Facebook comments a while back. We reached out and asked him if he would elaborate so we could share his story with the Get Rich Slowly website readers. This is Part 2.

Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want to submit your own reader story? Here’s how.

After I was out of debt, I didn’t stop saving. I remember buying a 19-inch TV (in cash) after my first month of being debt free, because I “deserved” it. Sarcasm intended. But I remember promising myself I will never pay a penalty fee, interest payment on a credit card (I pay in full each month) or have a negative net worth again.

I stuck with the notebook concept even after being debt free. The difference this time was that all of the money I had allocated toward debt was being put to savings. And that’s when it became fun. I still lived like I was in debt, but it didn’t hurt. It was natural. My sole savings account turned into two, then that morphed into a high-yielding CD. And slowly, my hundreds of dollars turned into thousands. I stuck to my game plan and was diligent about it.

Bragging led me to mutual funds

A couple of years later, I fortunately met a guy who introduced me to mutual funds. And that is when my life changed again. I was on the golf course with him and started  bragging about my saving accounts and CDs, and he basically said I was wasting my time and that I should get into mutual funds. I said I didn’t know anything about them, and told him I don’t have time to invest in stocks. He rebutted, “You don’t need to know about stocks; the manager does it for you, and it is like a bank you can’t drive to.” That caught my interest because I knew about banks.

So I went to the library (this was before the Internet) and picked up some easy-to-read books about mutual funds that discussed what they were and how to pick them, and the rest was history. After reading a few books and realizing they all basically said the same thing, I took out the most recent Kiplinger’s Personal Finance magazines. I was determined to look at the top-rated funds over the last three, five and 10 years. I learned if you pick the performer for one year, you are only chasing past performance because most of the profit has already been realized! In other words, only the existing shareholders are extremely happy enjoying that great return. What would happen if I had gotten in at the top? Not much room for growth. So I figured I’d be safer looking long term because that is what I investing for — not three years from now, but 30.

I remember clearly seeing two funds repeated in both categories (five- and 10-year). They weren’t No. 1, but second and fourth,  so not bad.  I was OK with that.  I also liked the fact that I could open an account with only $25 a month with a monthly allotment from one my accounts.  So I called and they mailed me their prospectus, which was required before signing up. It was as easy as that.

If I was to teach somebody today what I learned over the years, I would say that you would want to choose a fund whose management fees are relatively low (below 1.3 percent), stay away from funds that take 12b-1 (advertising) fees and load funds, and ensure that the manager was at the helm during the period of nice, positive returns.  For example, if you are looking at a fund that made 17 percent on average for five years, make sure the manager hasn’t been there for only six months to a year because he or she would be riding their predecessor’s coattails.

Another thing to consider that made me feel better about my investment choices: look at the percent performance return when times were “bad.” Looking at 2000 and 2008 would be great examples. It’s great to get 20 percent annually, but it stinks when you lose 27 percent. But when comparing funds, if one lost 9 percent and another lost 3 percent during the same period, I would lean toward the 3 percent if everything else was the same.

With this new opportunity presented to me, the timing was perfect: I started in the mid ’90s during the recession. I didn’t realize it at the time, but I had been given a gift.

Were mutual funds really that good?

I remember looking at my fund “value” week after week and it was either going down or just flat line.  It was so bad, I remember talking to my mentor and venting to him, “I don’t know why I am even in mutual funds. I am just wasting money.” I was used to my savings accounts and CDs and each month they were worth more because of the interest paid on the accounts. I definitely experienced the joy of compounding interest.  But we were in a mild recession in the mid ’90.  I didn’t know any better. I wasn’t experienced.  My mentor stared at me and smiled, “You disappoint me.  I thought you were better than that, at least smarter. What about your goal?” he joked.  I never quite got it until one day (and I will never ever forget that moment) shortly after our discussion, I was looking at my value and remember being shocked.  I went from being close to $1,000 in the red (down) to positive $400.  I didn’t expect that. It only took a couple of days for the turnaround.  For whatever reason, I never expected it to be so volatile.  But it was then when I believed in the dollar-cost-averaging method.   I was purchasing all of these shares ($25 at the time didn’t buy much, but it meant a lot to someone who only made $1,200 a month) at a discounted price.  It started to make sense and I began to look for other funds into which I could diversify.  Now I was dollar-cost-averaging into three or four funds with no effort on my part. It was all happening electronically, so it was very easy.

I continued to live within my means. I no longer relied on the notebook, started to buy clothes, go out to eat, and started to bowl again, all while paying my bills in full.  Now my money was making money and I could pay off my credit card in full. Any car loan, I would pay off early as part of my game from old. When I got a furniture loan, I took advantage of the zero percent for 12 months, but made absolutely sure not to be  late making the lump-sum payment because they backdate all of the previous interest.

Bragging led me to help my dad

When the tech bubble was building,  I finally felt financially independent as my money was making money and I earned more in a day than I made in a month at my job.  And now I could share what I’d learned.  I actually helped my dad get into the “preparing for retirement” reality. We were at a restaurant, and he was bragging about all of his CDs. He was in his mid-50s at the time, and I told him how I had made $12,000 that day. He was a little shocked — similar to the reaction I had with my friend on the golf course. The tables were turned. We got together soon after and talked about mutual funds. He became more devoted to saving/investing than I ever was. It was one of the few things we could bond over at the time. (Now we have that and my 7-year-old son’s incredible golf talent with my dad on the bag during junior tournaments.) We would bounce ideas off each other and call each other when the market made big moves up or down. We’d compare losses and gains and relate to each other. I am grateful for this opportunity. The way stocks sky-rocketed during that three-year period, I started to think I could retire at 40.  I envisioned an endless money train, fast-tracking me to wealth.  I didn’t know any better of what was to come. There was frenzy in the air, and it was all smoke and mirrors.

I remember clearly talking with my dad in May 2000 and telling him, “I have a gut feeling that this was the end of the tech bubble. I should take some profit.” But we both said, “It is due one more jump up” like it had in the past.  It never happened.  I was complacent with my money and hard work and sacrifice.  The bubble burst and I lost all the value. But remember, you only “lose” when you sell. I was young, still not married, with no kids, no worries. I had a good job in IT then.  But it stunk to think about the “value that was.” To this day, I still think, “What if I had taken that profit when I had the chance and reinvest it all over again, how much more I would have had today.” But thankfully, I stuck with dollar-cost-averaging the same funds I had invested before the tech boom and stuck to the plan. I monitored the value as it went up and down during the “lost decade” when you gained 2 percent over 10 years.

Every December, I would see the capital gains and the dividends being re-invested in my accounts. I was accumulating many shares by sticking to the game plan. I reinvested the capital gains and dividends over the years and it was all on autopilot. It was easy. Then 2008 hit and I got hammered with a 70 percent loss, as did most normal Americans who had invested in the stock market. Very few saw it coming this time. I remember talking to my dad in November 2008 after the umpteenth triple-digit loss and way too many 400+ point losses in the market, and he said he had to sell because he was losing everything.  But he was 64, so I didn’t blame him. It was at that moment when I considered it seriously as well.

I pulled out a notebook and weighed the options, just as I had done 15 years prior. I weighed the pros and cons of selling. Scared, I almost pulled out at the near low, but I had remembered the voice of my mentor, “You disappoint me. Stick to your goal.” I remembered that moment when in a flash the value had re-appeared and I was in the positive. Thankfully, I didn’t pull out and I stayed with dollar-cost-averaging and actually threw $4,000 — most of my cash on hand — more into the “fire.”

Then it happened.  It was March 2009 when that “a-ha” moment occurred and I got back to even. Because of the large number of shares I had accumulated through the good times and bad, the small increase in prices exponentially sped up my personal recovery.  Without changing a beat from what I did in 1995, from that scary moment in 2008 until today, my shares have quadrupled and then some.

Reflecting on the journey and planning for the future

I can tell you, the journey seemed easier when I had only just a few bucks to my name and it was easy to go after one debt at a time. The process was simple. It was even easier that I wasn’t married, had no kids, relatively healthy and had met the right people at the relative right time. But I used these resources, used the library for free books, a subscription to Kiplinger, Quicken (which has replaced my notebook and it has all of my expenses tracing back to 1994) and the Internet to track my finances, the Money Club on CNBC (no longer on TV) and the desire to retire early to guide me during my pursuit. After being burned twice in 2000 and 2008, I truly felt “Fool me once, shame on you. Fool me twice, shame on me” with these bubbles. I promised myself that I would have more foresight as to why these things happened and take more responsibility as who controls external factors of my life.

Today, I have educated myself about the Federal Reserve (and consequently have become very concerned about our future) and what makes bubbles and how perception is controlled in America. I discovered you really have to uncover a lot of layers to maintain your wealth once you have accumulated it. I am more cautious then ever. I get so frustrated when I hear the media talk about that the recovery is here and America is on its way back up and there is a lack of inflation. As someone who has tracked pennies for his entire adult life, I know food is more expensive, medical is more expensive, rent is more expensive, cars are more expensive – but there is no inflation? That is because the government adjusts the formula not to count these “essential” elements (food and energy). It doesn’t seem right.

So I have learned that you have to dig a little deeper and go beyond what is preached in books and seminars. It is so true: The game is rigged for the rich, and the recovery has only worked for those in the stock market. I am living proof. I haven’t had a raise in six years and fear I could lose my job every day because the business is suffering since it depends on American citizens to be generous. But if our customers don’t have discretionary income, they would rather spend money on food, medical, rent and maybe a car. But if you look at the market and the media, things are roses and rainbows. So it is a challenge to sit here and be confident that everything we see and hear will hold true in my future and my child’s.  I fear I am in the middle. I am not rich, and I am not poor. I am not protected and have a lot to lose after all of my hard work and sacrifice.

I have made a modest income over 20 years (averaging about $33K annually). Still, with discipline, a little education and sacrifice, it can be done. At first I struggled to find money for the next bill. Now I am almost prepared for a comfortable retirement. More important, I have helped others in the last 20 years with getting out of debt and shown them that it could be done. I felt poor back then and had a mountain of debt at my feet. It felt incredible to hurdle that mountain. It feels even better knowing where I am now compared with where I was.

Reminder: This is a story from one of your fellow readers. Please be nice. It can be scary to put your story out in public for the first time. Remember that this guest author isn’t a paid or professional writer and is just learning about money like you are. Unduly nasty comments on readers stories will be removed.

This article is about Choices, Investing, Reader Stories

There are 22 comments on this post.

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This article is by staff writer Kristin Wong.

Happy Financial Literacy month!

I’ll be honest. Four or five years ago, “financial literacy” meant nothing to me. I was far from being financially literate, and I didn’t really understand why it was important. I’ve always been pretty good at being frugal. But I never truly understood it. And I never understood just how much there is to learn in order to achieve financial security and, ultimately, financial independence.

In 2011-ish, somehow I became more interested in my finances. A few things were responsible for this change:

  • I made really stupid money mistakes during my career switch.

  • I was approaching 30. I didn’t want to live paycheck to paycheck anymore.

  • I read a lot of really good articles and posts on the topic of personal finance. Of course, this includes the writing at Get Rich Slowly. And Donna Freedman kind of became my frugal hero.

It’s amazing to think of where I was financially in 2011 and where I am now. My financial mind-set has drastically improved. Don’t get me wrong — I still have a long road ahead. But for the first time in my young life, I feel completely in control of my money. I’m not scared of it a bit! And that is a pretty amazing feeling. But that’s what knowledge and education does: it empowers you.

So I’ve been thinking about money and knowledge a lot lately, especially with it being Financial Literacy Month. We often discuss how financial literacy should be learned at a young age. Some believe it should be a requirement in schools. In fact, USA Today reports that, since 2011, four states have made a personal finance class a graduation requirement.

As reader Beth once pointed out, we should consider our educators into this equation too. Teachers have so much work and responsibility as it is, so I’m empathetic to her point.

But responsibility aside, I think we can all agree that learning about financial literacy at a young age is important. There are definitely some money basics I should have learned before I started college. Recently, I wondered: If I had to make a financial literacy syllabus, what would I put on it? Basically, what do I wish I had known about money when I was younger? Or, if I ever decide to have kids, what would I want them to know about money?

I think my personal finance syllabus would look something like this:

  • Understanding the gap: Living below your means: I remember the first time I read about the “gap” between how much you earn and how much you spend being the key to wealth. It melted my face. It’s so simple and obvious, yet so overlooked. When I finally “got it,” it was because I realized that the bigger the gap, the better I could achieve my financial goals.
  • Compound interest: How it can work for (and against) you: We all know compound interest is pretty magical. But when you actually see the numbers, it’s kind of surprising. I’ve written about how a $100 pair of Doc Martens spiraled me into almost a couple thousand dollars worth of debt, thanks in part to compound interest. I didn’t understand the power of it back then.
  • Why an emergency fund is the foundation of your financial plan: When I was a teen, my dad always encouraged me to have a “cushion” in my bank account. So, thankfully, I’ve always kind of understood the role of an emergency fund. Whether they’re minor or major, emergencies happen. If you’re trying to work toward a financial goal, it can be really frustrating to experience these setbacks. Sometimes that frustration makes people quit. A cushion makes those setbacks a little less discouraging. In a way, it helps propel your goals!
  • Realistic budgeting: I’d put this on a syllabus because it’s a perfect example of mind over matter. You can crunch the numbers all you want — at the end of the day, money is more about mind than it is about math. I mean, if you can make a supertight budget and never break it, well, I bow down to you. You are a frugal hero among men and I am not worthy. But, for most of us, setting too-high standards can backfire. I can’t think of how many times I busted my budget because I didn’t give myself any elbow room. I thought I was exhibiting good financial skills by telling myself, “you will spend zero dollars on entertainment this month.” It would have helped to understand that I’m human, and I should probably account for that.
  • A guide to mindful spending: This probably wouldn’t be on everyone’s syllabus, but it’s something that’s important to me. As a whole, I think our culture would benefit from a little more conscious consumerism. We’re very wasteful. It’s ingrained in us. At least for me, that wastefulness has affected my personal finances in one way or another.
  • How to get started with investing — and then forget about it: This is something I’ve only recently learned. I’ll admit, for years, I’ve been scared of and intimidated by investing. It seemed like a maze to me — I didn’t even know where to begin. But I jumped in anyway, and it’s really not that scary. One of the most important lessons I’ve learned is something that J.D. recently wrote: “Ignore the news and ignore your fund.” It’s the same strategy Warren Buffett touts, and while not everyone agrees with it — well, I guess I do. Investing is more complex than budgeting and saving, yes, but it’s a big part of personal finance. And I think adding it to a syllabus would make it less scary.

So , yeah — that’s my syllabus for Personal Finance 101. And as I continue to learn about money, I imagine that syllabus would grow. For now, that’s what I’d put in a beginner’s guide to financial literacy. But there’s probably much, much more that can (and should) be added to this syllabus, especially considering our economic climate. But I won’t drag this out any longer. I want to read your thoughts.

For this week’s Ask the Readers, I’d like to know: What’s on your personal finance syllabus? What do you wish you had known sooner, and what do you think our younger generations could stand to learn more about now?


Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money, where he recently wrote about the relationship between action and fear.

A couple of weeks ago, a reporter from Kiplinger interviewed me about financial habits. “Do you think there are specific habits that make certain people more successful with money than others?” she asked.

I generally don’t like to make generalizations, so at first I hedged my answers. But the more I talked with the reporter, the more I realized that I do see differences in the way people handle money. I thought about the people I know who are always broke, including my brother. These folks seem to share some common qualities. And the people I know who have managed to build wealth? They share some similarities too.

Note: The outcome of the Kiplinger interview was this slideshow (yes, I hate slideshows too) about the reasons people remain broke.

None of these differences are absolute, of course, but from looking at my own friends, and from reading the stories Get Rich Slowly readers have sent me over the years — especially stories about how people have moved from debt to wealth — I do think there are some patterns, including:

  • Successful people surround themselves with positive people. They limit their exposure to negativity and naysayers, preferring to spend time with folks who have can-do attitudes. They don’t have time to listen to the reasons something can’t be done; they’d rather find ways to make it happen.
  • Successful people aren’t flummoxed by failure. They know that mistakes are inevitable and should be treated as stepping stones to success rather than signs of weakness or reasons to stop trying. (As a side note, I’ve become increasingly convinced that the best thing we can do for our children is not to praise achievement, but to praise effort. The former breeds fear of failure.)
  • Successful people manage their time effectively. They recognize that minutes and seconds are a precious non-renewable resource. So, they set priorities and pursue them with passion. My successful friends seem to watch less television (and play fewer videogames) than my unsuccessful friends, for instance. There’s nothing inherently wrong with TV and Flappy Bird, but they suck up time that could be spent exercising or reading or taking a class.
  • Successful people ignore the opinions of others. They don’t feel compelled to “keep up with the Joneses.” They limit their exposure to mass media not only because it allows them to be more productive, but also because it reduces the influence of advertising and the pressure of cultural norms. When investing, they don’t follow the herd. The wealthy people I know all drive older cars (many of them bought used!), dress modestly, and avoid conspicuous consumption. But the people I know who are most often broke? They’re on top of trends and fashion.
  • Successful people have direction. They act with purpose. They know why they’re working hard and saving money. They have a mission, even if it’s as simple as putting their kids through college, and their daily actions are aligned with their long-term goals. None of the folks I know who struggle with money have a clear idea of what they want to do with their lives.
  • Successful people focus on big wins. Yes, they develop smart habits and pay attention to the small stuff. But they also understand that if they’re diligent with their dollars, then the pennies will take care of themselves. The average person economizes on the small things but isn’t willing to make sacrifices when it comes to housing, transportation, or income. And the folks who are broke all of the time? Well, they fritter away their pennies and their dollars.
  • Successful people do what’s difficult. They don’t procrastinate. My friends with money work longer, harder, and smarter than my friends who have less. They practice deferred gratification, sacrificing small comforts today in order to obtain greater rewards tomorrow.
  • Successful people make their own luck. They practice awareness so that they can recognize opportunities when they come along. Moreover, they act boldly, seizing these opportunities where others might hesitate to act.
  • Successful people believe they’re responsible for their future. They have an internal locus of control. That is, they understand that although it might not be their fault they’re in a given situation, it is their responsibility to change it, to respond productively — and proactively.
  • Successful people grow and change over time. They adapt. They evolve. They’re not afraid to entertain different points of view. Most importantly, they’re not afraid to change their minds. They seek knowledge and experience, and they allow the things they learn to mold them.

Most people (including me) follow a few of these rules but not others. The most successful people I know do all of the things on this list; the least successful people do none of them.

Note: For a similar (but different) discussion, check out this controversial three-year-old article on the differences between the rich and the poor.

I guess the bottom line is my friends who are successful with money (and life) take what they do seriously. They treat their personal life as if it were a business. They act as both CEO and CFO, and they do their best to “grow the business” over time.

Your personal wealth is your real business; everything else just supports it.

From your experience — and from observing the people around you — what qualities do you believe separate successful money managers from those who remain broke? Given roughly similar backgrounds, why do some folks build wealth and others struggle to make ends meet? And have you seen anyone overcome their past to build wealth?


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Savings2.00%2.02%$0SMART Savings Account - for young adults 18 yrs or younger, withdrawals prior to 18th birthday may result in a penalty
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Savings0.93%0.93%$1Statement Savings - Rate collected within: NY
MMA0.93%0.93%$1,000 Yield of Dreams Money Market -Tier Less than $100,000 - Rate collected within: NY
Savings0.90%$0Online Savings - APY for all balances
MMA0.90%$0Nationwide - apply online
MMA0.90%$1Online Money Market Account
Savings0.90%$100CIT Savings - APY for daily balances below $25,000 - apply online
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Savings0.90%0.90%$10,000Savings Account
Savings0.87%0.87%$0Online Savings - Free online transactions, no monthly fees, no minimums - Apply online
MMA0.85%0.85%$5,000Online Money Market - Rate/APY for balances between $5,000-$500,000
Savings0.85%0.85%$0Online Savings Account - Account can only be held in individual or joint ownership - Up to 6 preauthorized transfers from your Online Savings Account per statement cycle
Savings0.85%0.85%$0Online Savings Act - Rated Kiplinger's Best Online Savings Account, no minimums, no monthly fees, manage accounts securely online
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Savings0.80%$0Nationwide - apply online
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MMA0.80%0.80%$100,000Money Market Tier $100,000 and up
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MMA0.80%$0Money Market Savings - Rate earned on balances up to $99,999.99 - transaction limitations - apply online
MMA0.78%0.78%$250,000Premium Money Market - tier $250,000 and over
Savings0.75%$0360 Savings Account - No fees - No minimum balance - Online account
Savings0.75%0.75%$50cuSave - Online Savings - Membership is limited to residents of Massachusetts or New Hampshire or those who work for a company that is based in Massachusetts
MMA0.75%0.75%$1Money Market Savings Account
Savings0.75%0.75%$1,000UBM Direct Savings Account
MMA0.74%$0Online MM Rate - apply online
MMA0.70%0.70%$50,000Money Market Tier $50,000-$99,999
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MMA0.70%0.70%$50,000Central New York market area only
MMA0.70%0.70%$10,000Money Market Tier $10,000 - $24,999 - $10 minimum balance fee if average balance is below $2,500
Savings0.70%$1Performance Savings
MMA0.70%0.70%$5,000 Money Market Tier $5,000 - $9,999 - $10 minimum balance fee if average balance is below $2,500
MMA0.70%0.70%$25,000Money Market Tier $25,000 - $49,999 - $10 minimum balance fee if average balance is below $2,500
MMA0.70%0.70%$2,500Money Market Tier $2,500 - $4,999 - $10 minimum balance fee if average balance is below $2,500
Savings0.70%0.70%$1Clear Sky Savings - Tier $1 - $249,999
Savings0.69%$0Online Savings Rates - apply online
MMA0.68%0.68%$25,000eMoney Market online account
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MMA0.66%$1,000Tiered Money Market - tier $1,000 - $9,999.99 - apply online

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Even though rates are low right now, they will eventually rise as the economy recovers. An online savings account, money market account, certificate of deposit (CD), interest checking or rewards checking account can help you make the most of your funds on deposit. Don’t throw your money away by saving it somewhere that doesn’t pay. An online savings account is a safe and convenient way to earn interest on funds that you may need easy access to, and it is far better than simply keeping extra sums in cash or in a checking account.

When it comes time to research which online high-yield account is best for you, I hope you’ll take a look at the research and information we consistently maintain on this page. Plan to come back frequently to check that your accounts are still performing the way you want them to and make sure that you are receiving the best service for your patronage.

It takes time to research banks, so we also created a synopsis of what some of the major banks offer with a direct link to their individual website. That way you can easily learn more and open an account when you’re ready. Here they are in no particular order:

GE Capital Bank’s Online Savings Account offers a 0.90% APY (rate as of April 8, 2014) with no minimum deposit to open and no transaction fees. GE Capital Bank also tied for “Best Savings Account” by Money Magazine in 2013. Interest is compounded daily, funds are accessible 24/7 online, and external accounts can be linked. Deposits are FDIC-insured.

Barclays’ Online Savings Account offers a 0.90% APY (rate as of April 8, 2014) with no minimum deposit to open and no monthly maintenance fees. Barclays also tied for “Best Savings Account” by Money Magazine in 2013. Interest is compounded daily, funds can be moved electronically to external accounts, and deposits are FDIC-insured. Barclays is a large bank that has been around for over 300 years and operates in 50 different countries.

Ally Bank’s High-Interest Online Savings Account offers a 0.87% Annual Percentage Yield or APY (rate as of April 8, 2014) with no minimum deposit to open and no monthly fees. Ally Bank won top honors in the MoneyRates survey of “Best Savings Accounts for 2014″ which recognizes banks that consistently offer high rates over an entire year. In addition, it was also rated the “Best Online Bank” by Money Magazine in both 2012 and 2013. The bank’s other consumer-friendly policies include daily compounded interest, 24/7 customer service, and no charges for ATMs.  (Ally actually reimburses ATM fees charged by other U.S. banks at the end of each statement cycle.) They also have an award-winning-mobile-banking application. Deposits are FDIC-insured.

The CIT Bank Savings Account offers 0.95% APY on deposits of $25,000 or above, so if you have a large balance, they are a good option to consider. Even if you don’t have $25,000 or more to deposit, their 0.90% APY on deposits of $100 to $24,999 (rate as of April 8, 2014) is still very competitive. They have no monthly fees. Interest is compounded daily. CIT Bank’s online savings accounts offer 24/7 access via the Internet, online statements, and linking to external accounts. CIT Bank was founded in 1908 by Henry Ittleson to provide financing for businesses. Throughout the 20th century, CIT expanded its product lines (including CDs, IRAs, and custodial accounts) to consumers and many business sectors and small businesses. Deposits are FDIC-insured.

American Express Bank’s High-Yield Savings Account offers a 0.80% APY (rate as of April 8, 2014) with $1 minimum deposit to open and no monthly fees on its high-yield savings account. American Express Bank took second place in the MoneyRates survey of “Best Savings Accounts for 2014″ with a mention that it edged out Ally Bank in the two most recent quarters. A longtime leader in the world of financial services, American Express is a trusted brand known for exceptional service and it apparently understands how to compete. Online accounts are accessible 24/7 via the Internet, transfers can be made to external bank accounts, and interest is compounded daily. Deposits are FDIC-insured.

Mutual of Omaha Bank’s Online Money Market Account offers 0.85% APY (rate as of April 8, 2014) on balances from $5,000 to $500,000. Better known for its insurance products, Mutual of Omaha Bank’s online services include a national network of free ATMs, free online bill-pay and account-to-account transfers. Deposits are FDIC-insured.

CapitalOne360 offers 0.75% APY (rate as of April 8, 2014) on their 360 Savings account with no minimum balance and no monthly fees. External accounts can be linked to facilitate deposits, and their online savings tools include an Automatic Savings Plan with the ability to create multiple accounts and track your savings goals. Deposits are FDIC-insured.

EverBank’s Yield Pledge Money Market Account offers, for first-time account holders, a 1.10% bonus rate for the first six months, and a first-year APY currently at 0.86% for balances up to and including $50,000 then an ongoing APY currently at 0.61% APY on their Yield Pledge Money Market Account (rates as of April 8, 2014). There is a $1,500 initial-deposit requirement. They offer convenient Internet access with live customer service 24/7 and a mobile deposit application. EverBank promises the “Yield Pledge Money Market Account rate will be in the top 5 percent of competitive accounts at leading banks nationwide.” EverBank is an online-only bank that has been named “Best of the Web” for five consecutive years by Forbes.com and was also named “Best of the Breed” for online banks by Money Magazine. Deposits are FDIC-insured.

The FNBO Direct Online Savings Account offers a 0.85% APY (rate as of April 8, 2014), a $1 minimum balance to open an account and no monthly fees. FNBO was named Best Online Savings Account in 2008 by Kiplinger’s Personal Finance magazine. Deposits are FDIC-insured.


Here is another group of banks worth considering; however, they tend to have stiffer requirements, more hoops to jump through or lower customer reviews.

Emigrant Direct’s American Dream Savings Account offers 0.50% APY (rate as of April 8, 2014) with no minimums and no fees. An external checking account can be linked to Emigrant Direct’s high-interest savings account and Internet access is available 24/7 to manage your deposits. Interest is compounded daily. Deposits are FDIC-insured.

Presidential Online Bank’s Premier Savings Account offers 0.50% APY (rates as of April 8, 2014) on balances up to $35,000. Balances in excess of $35,000 earn 0.25% APY.  Rates drop on balances over $35,000, a rather unusual approach to saving. An initial deposit of $5,000 is required, but there are no minimum balances and no monthly fees. A nationwide network of ATMs is available free of charge as well and online electronic fund transfers from external banks is available to open the account and transfer funds. Deposits are FDIC-insured.

Savings Square Savings Account offers 0.55% APY (rate as of April 8, 2014) with a $200 minimum balance to open, no minimum balances after that, and no monthly fees. The maximum account balance is $100,000. There is access to a surcharge-free nationwide network of ATMs and deposits are FDIC-insured.

SallieMae’s High-Yield Savings Account offers 0.80% APY (rate as of April 8, 2014) with no minimum deposit and no monthly fees. Sallie Mae was awarded a not-so-distant third place in the MoneyRates survey of the “Best Savings Accounts for 2014” and its deposits have risen dramatically as a result. Sallie Mae accounts are accessible online 24/7 and interest is compounded daily. In addition, Sallie Mae offers a 10% annual match on Upromise Rewards, which can be transferred to your High-Yield Savings Account, used to pay down an eligible Sallie Mae student loan, or paid out via check. Deposits are FDIC-insured.

Lending Club is a different option to consider. According to its website, Lending Club is an “online financial community.” Personal loans between $1,000 and $35,000 are funded (fully or partially) by investors. Projected returns for grades A to C are 4.77% to 8.24 percent (rates as of April 8, 2014). Funds are borrowed from investors through Lending Club Notes pursuant to a prospectus that is on file with the Securities and Exchange Commission. Lending Club is not a bank and invested funds are not FDIC-insured.


There are a lot of ways to research the best interest rates online. In addition to the more in-depth bank reviews we periodically produce, there are a number of websites that cover local and national banking deals on a weekly basis. The EDIE calculator can tell you which types of accounts at which banks and for which amounts are FDIC-insured.

The U.S. personal savings rate has been in decline for many decades, which some believe is helpful to a sluggish economy. On the other hand, a higher personal savings rate may also lead to stronger economic growth over the long run. Regardless, it’s important to develop the habit of saving. Knowing which institution offers the best rates and services is critical information to making the most of your savings in any economic environment.

We would like to find the best possible savings account rates and money market rates to share with the readers of Get Rich Slowly. Do your homework and choose an online savings account that works for you, and then share that knowledge with others in the comments.

Do you use an online bank for savings? Have you been able to find savings or money market account rates that are even better than what we have listed here? If so, please let us know. Don’t forget to include all the details: name of the bank, state, rate, when you opened this account with this rate and whether you can open an account online or have to go to a branch in person.


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