It’s unfortunate that most Americans are still earning pennies from their savings accounts. Many new online banks have appeared to offer more attractive interest rates.
The problem is that very few people know about these new online banks with higher interest rates. If more people knew about these banks they would shift their savings accounts from traditional banks to online banks to capture higher interest rates.
Earning a higher interest rate is particularly important for savers who are on a fixed income or don’t want to take major risks with their investments. With the inflation rate at 1.5% to 2%, it’s important that you earn more than this on your savings account otherwise all of your money will eventually be lost due to inflation.
Why Online Banking is a Necessity for Americans
There is a general feeling in most of us that our money ought to stay in the bank. Unaware to most is the fact that the money you save in local big banks earns little to no interest; it’s like burying it under your mattress. Yet, many online banks have lucrative rates – as high as 0.5%.
There’s a nationwide expectation that the government is likely to raise the rate of federal funds before the year ends. So go online and compare different saving accounts and their rates. Then settle for the option that will offer you the best returns.
Based on a report by NerdWallet, it is possible to earn an interest rate that is 10 times greater what’s usually offered at local banks. Some big banks are still keeping their interest rates on savings accounts below 0.05% and some have even dropped the interest rate all the way down to 0.01%. This is simply unacceptable when there are so many other options out there. The catch is you have to be willing to search for an online bank and transfer your money to them.
If you’re after higher interest rates, consider using online banks. Online banks don’t have high overhead costs of managing a brick-and-motor building. Therefore, they can afford to offer customers high rates.
Instead of allowing your hard-earned money to lie in a traditional bank earning cents annually, opt for online banks for higher interest.
The Competition is Huge
With the new interest rate of 2% making extra money via your saving accounts has never been easier.
And that’s not even the tip of the iceberg. The government intends to increase the rates soon. Another federal rate increase will mean that banks will offer Americans even more competitive interest rates.
Therefore, we recommend you switch to online banking as soon as possible if you want to enjoy greater benefits coming soon. The best part with online banks is you might enjoy an even better interest rate of 0.5% or even higher. So, more banks will start offering attractive incentives to keep their current customers and attract new ones.
Some of the best interest rates currently available include:
Marcus Bank – Marcus is an offshoot of Goldman Sachs and has a consistent reputation for offering sky high interest rates on savings. They are currently offering 0.5% on deposits. The best part is that non minimum balance is required and the account is absolutely free.
American Express National Bank – Although not as high as Marcus, American Express National Bank is offering 0.4% interest on savings accounts.
Nationwide My Savings Account – The Nationwide My Savings Account also offer a 0.4% interest rate on all deposits. There is no minimum balance required to get this offer and there are no account fees.
Varo Savings Account – The Varo Savings account charges no fees whatsoever. They also offer an interest rate of 0.4% on all deposits and they have a reputation for raising interest rates as soon as the Federal Reserve raises rates.
How You Can Take Advantage of Better Interest Rates
It’s simple – You can open many accounts with different banks offering higher interest rates on savings. What’s even better, online banking makes it easier to open multiple accounts. There’s no need to stay loyal to a traditional bank that’s not offering the best rates.
To land the best deals, go online and do your research. Try finding online banks offering attractive interest rates than the national average. Compare different accounts, financial options, and interests to determine which banks will better meet your financial needs.
Remember to open multiple online accounts so you can take advantage of future interest rates and benefits. There is no reason to stick with a traditional savings account that pays 0.05% when there are so many online alternatives that pay 10x more interest.