Are you Interested?

I've talked to a couple people about high interest savings accounts lately, so I wanted to put the info down here. Currently, my credit union, which I love, is giving 0.5% on the standard savings account. What does that mean? Start with $1000 and in a year, you will gain $5. Yup, that's it. Now, they do have some special accounts that have a higher yield if you keep a lot more money in there, but they are still way below what you can get with online banking.

I am currently using GMAC Bank and getting 5.3% annual return. So, if I had that same $1000, I would now get $53 back over a year, or a 10x increase. To put that another way, at 0.5%, it would take 139 years for $1000 to double to $2000. At 5.3%, it would take less than 14 years. Currently, all of my non-retirement savings is here.

Is it secure? All of the different options I looked at were offered by well known institutions, and all were FDIC insured. Banks will have different options. For instance, with GMAC, I had to open with at least $500, I have to keep at least a $500 balance to avoid fees, but I get free checking. Others may have opening balance requirement, but then no minimum. Some offer checks, some don't.

How to choose? Then best way I found is to use Bankrate.com. They show many different banks with all of their options, requirements, and even ratings.

Happy earning!