Should I Open a Savings Account - Where?

Question

I have a savings account earning 0.1% at a national chain bank that just continues to pi$$ me off! I want to close the account but don't know what to do with the money. I saw 1.9% savings account from Credit Karma, 1.5 somewhere else I can't remember, or should I park or use the money in some other way? Maybe open a brokerage account?

Counseling and advice please.

Jacob Sampson · Answer

This is the downside of low interest rates.  You can't get interest on your savings.  I would look into an online bank as you mentioned or look to a local credit union.  The credit unions are often able to give better interest rates.  No matter what, though, it aint gonna be that exciting.

Brett B. · Answer

I have been using Ally bank for years and never had any issues.  At one point they were offering something like 2.2%, but I believe they are now down to 1.7%.  They are an online bank, which I think is actually a plus.  I set up a portion of my direct deposit to hit that account every week and the money adds up, out of sight out of mind.  When I need access to it, it just takes 1 business days to transfer into my primary checking/savings account with Wells Fargo and no fee.

Dillon Dale · Answer

@Flash Alexander I have one with Barclays online bank. I think their rate is currently 2.35%. Much better than .01% Wells Fargo offers me

Larry Alexander · Answer

Thanks y'all. I don't see any logic if CD's with a 5 year term are 2.0% and PNC savings is 2.0% - seems to make more sense to keep the money in savings where there is no fees, term, or penalty for early withdrawal.

Yonas Tekeste · Answer

I use discover which offers around 1.70%. Bankrate.com is a great website that compares multiple savings accounts and their interest rates

Lynnette E. · Answer

Any bank or credit union generally offers CD, called certificate of deposit.  Here is an example of one from a webpage:

https://www.usbank.com/savings...

You can shop the rates vs the terms vs the amount you have to invest.  Shortest ones are 1 month and they go out usually to 5 years.  The longer the term you request to leave the money in the higher rate you get.  There is a small penalty if you take the money out before the term is up.

If you have a lot of money a financial manager will have access to higher rates than you can get on your own, and the FM is paid directly from the cd issuer, not out of your proceeds or funds.  Even with their payment you get a higher rate than you can get on your own.

Danielle Wolter · Answer

@Flash Alexander I use CIT bank - they pay 2.35% interest. I really only keep emergency fund money in cash though - everything else is invested.

Larry Alexander · Answer

@Lynnette E. Do you have an example where I could check those out?

Lynnette E. · Answer

If you do not expect to use the money for a while, you could put it in cds.  They offer a higher interest rate and are FDIC insured.  Step them, so a cd matures every quarter to have access and put some of the money on longer terms, which generally gets higher interest rates.

Larry Alexander · Answer

Thanks! I opened an account at PNC Bank. 2.0 interest. Citibank has some great looking offers right now. I may get one of their cards.

Should I Open a Savings Account - Where?

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