Best Savings Interest Rates

If you are going to have a savings account, it is only natural to want to find the best savings interest rates. In today’s economy, savings rates are very low compared to some previous years not too long ago. Still, any rate is better than having money sitting around earning nothing. One of the best things ever invented was compounded interest on savings. This is how your money keeps trickling up rather than being stagnant.

Finding the best savings interest rate depends upon what the saver wants to do most. There are many list compilations available on the Internet for savings rates. Most will list the highest actual interest rate first, but that is not necessarily the best account to open. If the consumer only has a small amount to start up their savings account, they also want to find one that has no minimum deposit.

The “rate” for savings interest can accrue either simple interest or compounded interest. Ads should specify what type of interest is being advertised; for most it will be the compounded rate which is slightly higher than the simple rate. The APY (average percentage yield) is the rate after compounding is added into the rate.

A minimum deposit may be required. The best account requires that the saver opens the account with a $0 minimum; the highest minimum to open requirement listed is $25,000. Another good feature to have is a no monthly service fee account. Some banks charge as much as $20 per month in service fees unless the saver keeps $25,000 in that account. Many banks are friendlier and have both no monthly fees and no minimum balance requirements.

Usually the best savings account interest rate is the one that is numerically the highest that also is teamed with no monthly service fee. One would imagine that those banks that require large minimums to open an account and large monthly fees would also be offering larger interest rates, but that is not true. Some of the banks that are located in states like Utah, South Dakota and other states that do not have caps on some loan interest rates (payday & auto) are offering some of the best savings interest rates. This may tie into the fact that banks need to attract savings money in order to make loans. Opening accounts across state lines is possible via the Internet.

Today, a “best” savings rate for a money market or savings account is a 1.39% simple rate that brings in a 1.40% APY rate. There are other places to find best interest rate savings accounts. These are called certificate of deposit (CD) accounts. The “best” rate today for a 1 year CD is 1.54% simple interest with a 1.55% APY rate. Almost all of these require a minimum deposit from $500 to $50,000, but a few banks have 0% minimum CD accounts available. If you invest in a longer term CD, up to 5 years, you can find interest rates up to 3.20% simple interest with 3.25% APY rates. Rates are subject to change with the economy. If you lock yourself into a CD account for a longer period of time, rates may go up while you stay at the low rates of today.