With the lowest interest rates in a generation, it can be difficult to find a high interest yielding savings account in 2010. Interest rates for savers can depend upon your preference for online versus local institutions. Here are some suggestions for high interest yielding savings accounts.
High interest yielding online savings accounts
Savers who are comfortable with an online savings account will find higher interest rates for their savings accounts. There are currently two major online banks offering high interest yielding savings accounts with FDIC guarantees:
HSBC Bank Online. 1.10% APR savings account rate. $0 fees. No minimum balance requirement. $1 to open.
ING Direct. 1.10% APR savings account rate. $0 fees. No minimum balance requirement. $1 to open.
Both of these institutions offer savings accounts with FDIC insurance guarantees which protect the integrity of your capital. The current 1.10% APR is the high yield available for an online savings account from a major financial institution.
HSBC Bank offers traditional retail branch locations, but there is a separation between the online and retail accounts. If you decide to open an online savings account through HSBC, be aware that your account will be different than the account opened by retail customers at a physical HSBC location.
ING Direct began as an online bank catering exclusively to internet customers. ING Direct now has retail banking locations and the company does not differentiate between accounts opened online versus its physical locations. It is important to note that ING has a much smaller retail presence than other national banks and it is unlikely that you will be close to a physical location.
High interest online savings account are best designed for savers who are comfortable with internet-only access to their money. If you prefer to open a savings account at a physical retail bank, you should consider a high interest yielding brick-and-mortar savings account.
High interest yielding brick-and-mortar savings accounts
Savers who prefer having a savings account at a retail bank branch will find significantly lower interest rates than are available online. These accounts have daily minimum balance requirements so be aware that incurring a monthly fee will quickly defeat the purpose of having a savings account. Here are the current interest rates offered by two large national banks with a widespread branch network.
Bank of America. 0.05% APR savings account. $5 monthly fees unless the daily minimum balance exceeds $300. $25 minimum to open.
Citibank. 0.25% APR savings account. $4.50 monthly fees unless the daily minimum balance exceeds $500. $25 minimum to open.
If you are opening a savings account at a retail branch, you have the benefit of a large ATM network, access to branch personnel, and the ability to make deposits at a teller. Make sure that you are aware of the cost of these services. Online savings accounts pay significantly higher interest rates, but do not provide the same services as physical branch accounts. Be sure to read the full disclosures of your savings account and understand the minimum balance requirement to avoid fees.