It’s time to give yourself a ten-second financial check-up:
- Are all of your hard-earned dollars earning interest?
Savvy investors know that every dollar deposited at a bank, brokerage, or financial institution should be making money… and that includes your short-term savings, cash investment balances, even your checking account. If not, you should be looking for somewhere else to store your dollars…
There are a number of financial institutions that are showing their customers love by rewarding them with good returns on their short-term savings. So where is the best place for short-term savings? Let’s take a look:
High Yield Savings Accounts
Online savings banks still offer the best place for short-term savings. I went searching for the best interest rate that you can get right now on a high yield savings account. I avoided banks with teaser rates that change after a month or two. It was important to find a reputable bank that has a history of high returns.
There were actually two winners in this category. The best savings accounts for your money can currently be found at American Express Bank and Capital One Bank. There’s no minimum to open an American Express savings account. Capital One Bank requires a $1,000 minimum to open an account.
View a complete list of top high yield savings accounts.
Interest-Bearing Checking Accounts
Your checking account should be paying you interest on your money. That may sound surprising, but it shouldn’t be. Banks should pay you for the privilege of holding your money. Most commercial banks either don’t pay interest on checking accounts or require huge minimums to pay a low interest rate. If you want to earn interest on your checking account, you should take a look at online banks.
FNBO Direct is paying account holders a 0.65% APR on new bill-pay accounts. This interest rate is higher than the rate that commercial banks are currently paying on savings accounts. The minimum balance to open a new account is just one dollar. Open an FNBO bill-pay account now.
Certificates of Deposit
Savers that are looking for the best return on their money on a long-term basis should take a look at a certificate of deposit. CD’s have terms that typically run from a period of 3 months to 5 years. Rates will increase as the CD term gets longer.
You can get the best rate on a CD at Bank of Internet USA. The bank is paying 1.48% on a one-year CD. The minimum deposit is $1,000 and interest is compounded daily. This is far better than the national average of 0.53%.APR. Patient investors can get a higher rate on a longer term CD. First Internet Bank of Indiana is paying 2.65% interest annually on a 5 year CD. This beats the national average of 1.57%.
View a complete list of the best CD rates.
Online Stock Brokers
If you are looking for the best low-cost brokers, you should take a look at TradeKing and Zecco. These online brokerages charge under $5 per trade. TradeKing charges $4.95 for every buy and sell transaction. Zecco is even lower at just $4.50 per trade. This is incredibly cheap for an online broker.
If you are seeking more investment options, you should check out Scottrade and E*Trade might fit the bill. Scottrade is just $7 per trade and E*Trade is just $9.99. The prices may be higher but it’s worth it for all of the trading tools and research that they provide.
Now that you are aware of the best rates available, you can negotiate a better deal for your money. Be sure to look for the maximum rate that you can earn on guaranteed investments like savings accounts, checking accounts, and CD’s. Remember that every extra dollar that you earn in interest is one less dollar that you have to work for.
Do you know of any other investments that are paying investors a decent rate on short-term cash savings?