When it comes to saving money, there are a lot of options. Banks, credit unions, and online institutions offer various accounts with different features and benefits. What is an online savings account? SoFi experts say, "It's a proper savings account that functions kind of the same as one offered by a brick-and-mortar bank; the only difference is that you manage your banking requirements online."
There's even more confusion when you decide how liquid your cash needs to be--and that can make a big difference in the interest rate you'll earn on your savings. So that's why they have put together this list of hacks to help you find the perfect account for your needs!
Search for the highest interest rate
You should be comparing the interest rates of different banks, but also make sure you're comparing like accounts. That means that if you're comparing two or more savings accounts, they need to have the same features (no minimum balance and no monthly fee). This way, you can see which account offers the highest interest rate for your needs.
Determine how liquid your cash needs to be
The first step in determining how much of your cash can be safely kept in an interest-bearing account is to determine how liquid your cash needs to be. This is a combination of how much money you need to keep on hand and how much you can afford to lose.
The second step in determining how much of your cash can be safely kept in an interest-bearing account is to consider whether it's important for you to have access to the money at all times or if it would be okay if only some of the funds were accessible immediately and others could take a little longer.
Look at CDs if you need your money locked up
If you need your money to be locked up, a CD can be a good option. A certificate of deposit (CD) is an interest-bearing savings account with a fixed term and requires you to keep your money in the account for at least one year. Banks offer higher rates than regular savings accounts in exchange for this lock-in period.
Consider online banks
Because online banks are not-for-profit organizations, they can offer higher interest rates than traditional banks. They also have the added benefit of being FDIC-insured, so if you have a problem with one of these banks, you'll be covered by the same protection that covers all other federal deposit insurance plans.
Online banks typically offer more convenience as well. It is usually easier to open an account and make deposits or withdrawals at any time of day or night than at a local bank (although this may not be true if you live in remote areas). And many online accounts allow for 24/7 access via mobile devices so that you can manage your finances from anywhere!
Check out online tools
- If you want to know if a savings account is worth it, check out online tools. Many ways can help you determine if the interest rates offered on a savings account are competitive.
- You can also look for other benefits such as cashback, rewards, and more. Some banks offer these types of perks as part of their product offerings.
In the end, it's important to remember that these are just some tips you can use to find the right interest-saving account. You could also try out an online tool like DepositAccounts.com, which helps you search for savings accounts on various criteria, including the interest rate and minimum balance.
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