I am not much of a “rate chaser.” However, because I lean towards a fairly conservative investment strategy (growing even more conservative thanks to recent volatility), I keep an eye on interest rates for savings account, CDs, etc. Looking for the best interest rates on savings these days does not normally yield anything worth writing home about.
Lending Club (9.65%)
If you have a slightly stronger stomach for risk, and like to have more control over exactly what your investment dollars are in, give Lending Club a try. I have a small portfolio of loans there earning about 10.90%.
Smarty Pig Savings Account (2.15% APY)
Smarty Pig has revolutionized online savings by combining aspects of online banking and social networking. Well, that is, if you want your banking to be social (you can opt not to share info or accept contributions). One of the options you have with your Smarty Pig online savings account is the ability to receive “contributions” from your friends and family. For instance, let’s say you are heading off to school and need some help buying books. You could create a “Textbooks” goal and choose to accept contributions. Friends and family could “feed your piggy” ever so often without having to send you cash directly. It’s a great concept, and a great rate, too!
ING Direct (1.10% APY)
We still have a number of sinking funds at ING Direct. They are not earning a lot of interest, but I’ve yet to find an easier interface to navigate saving in multiple accounts, creating automatic contribution plans, etc. I guess I’m willing to sacrifice a couple tenths of a percentage points for ease of use with these designated savings accounts.
Ally Bank (1.29% APY)
Ally Bank has always intrigued me, and not just because of their cute commercials starring those kids with puzzled looks on their faces. Kiplinger’s Personal Finance magazine (my favorite money magazine) declared their online savings account the “best savings account” in their December 2009 review. I also closely follow their high-yield CD rates, no-penalty CDs, etc.
Local Money Market Accounts
In addition to these online savings accounts, don’t forget to check out your local bank or credit union. Often times, these smaller institutions will run some nice incentives, particularly if you have a good amount of money saved (like a six-month emergency fund).
Our local bank recently had a 6-month promotion on their money market account – offering 2.25% APY on balances over $2,500. The promotion was so successful, they continued it for another six months.
*Rates current as of 08/03/2010 and are subject to change
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{ 9 comments… read them below or add one }
I used to use ING Direct until that lowered their interest rates
WTDirect promo has been canceled.
@Allen: Thanks for the heads up. That sure didn’t last long! Maybe it was too successful, huh? I’ll make a note in the post.
Instead of chasing yields on savings accounts/CDs/Money market accounts, an alternative is to open an account at a discount broker and buy into bond funds.
I’m not endorsing the companies or products, but opening a Zecco account and buying into AGG or BND will net you around 3.5% with very little cost, provided you meet the terms.
Not a bad idea, Scott. What’s the downside risk of owning such bonds? As an ETF, I suppose there is risk of loss of value much like playing a dividend stock? I’m asking here because I am admittedly ignorant on bonds.
Also, Ally Bank was formerly known as GMAC. Taxpayer dollars bought it a new name, a new marketing campaign and a new lease on life. Perhaps if you invest in it you can get some of your tax dollars back. I’ll steer clear.
What about SmartyPig? Have you used that bank?
I have yet to try Smart Pig, but constantly here good things about them. Perhaps I’ll set up a little savings account there and report back with the results.
I’ve used SmartyPig with great results. Don’t quote me on this, but I believe their rates on deposits below $50k are 2.2%.