The old saying "If it sounds too good to be true, it probably is," still applies in today's online and mobile banking world. New high-yield accounts are being introduced on the internet and in the mobile world that offer around 1.5 percent on checking accounts (vs. the national average of 0.2 percent) or more than 2 percent on savings accounts (vs. the national average of 0.3 percent). But they're often not the great deals they first appear to be once you understand the details. Keeping an eye out for these four red flags can help you identify potential issues before you decide to give one of these accounts a try.The high-yield account isn't from a bankThe first red flag is if the financial company offering a high-yield account isn't a bank or credit union, but that doesn't mean the offer is a scam. It may be an investment account that a brokerage company is offering, which shouldn't be confused with a deposit account. Deposit accounts, such as a checking or savings accounts, are … [Read more...] about 4 red flags about high-yield bank accounts
Customers bank cd rates
Nick Clements / MagnifyMoney.com Although the Federal Reserve has been consistently increasing interest rates, most savers have yet to feel the impact. At Bank of America, the highest advertised rate for a Rewards Savings Account is only 0.06 percent. A $25,000 deposit would generate a mere $15 during of interest over one year, before taxes. And Bank of America is not alone: Most traditional banks have stubbornly kept interest rates low on savings accounts while they happily increase rates on loans. The situation is different online, where competition has never been fiercer. Internet-only banks are engaged in a pricing war that shows no sign of slowing down. Well-known banking brands are making it easy for savers to earn at least 2.05 percent APY with an online savings account. Consider smaller bank brandsAnd if you are willing to experiment with smaller or lesser known bank brands, it is possible to earn 2.35 percent or more. Synchrony Bank, … [Read more...] about These banks are offering savers the best interest rate deals
As interest rates rise, smart consumers are shopping around for the best places to stash their cash. This is especially the case for consumers with savings in brick-and-mortar banks. These banks have been slow to raise their deposit rates in the last few years of rising interest rates. As consumers hunt for higher deposit rates, they should beware of potential gotchas that could cost them money and time. 1. Existing customers often lose out on the best rates It's common for banks to offer the best rates to new customers who bring in new deposits. Instead of raising interest rates on existing savings or money market accounts, banks will launch a new account with a rate higher than their existing account rates. This new account is marketed only to new customers. Sometimes when banks offer these new accounts, they will allow existing customers to open them. However, it's often up to the existing customer to find them. 2. Promotional CD rates will renew with much lower rates In … [Read more...] about 5 things your bank won’t tell you as interest rates rise
NEW YORK - Stocks are plunging, the cost of borrowing money is rising and everything suddenly feels very shaky. Time to overhaul your financial plan, right? Financial advisers hope your answer is an emphatic "no." Ideally, you already set up your plan with the understanding that something as common as a 10 percent tumble in stocks would occur again and again. But at the very least, the recent turmoil offers a good marker to reassess where things are, and where you want to be. Conditions have certainly changed from the smooth run of past years, when stock funds were returning double digits with few hiccups. In the last month alone, S&P 500 index funds have dropped close to 10 percent. Bond funds are supposed to be the safe part of a portfolio, but even many of them have lost ground this year. Investors are ringing the phones much more than usual at Inspired Financial, a financial-planning and investment-management firm in Huntington Beach, California. But the voices from clients … [Read more...] about Falling stocks, rising rates: What should investors do?
One benefit of rising interest rates is higher bank deposit rates, but most brick-and-mortar banks have been slow to raise theirs. In the last two years, the average savings account yield at banks and credit unions, the vast majority of which are brick-and-mortar institutions, has only risen from 0.18 percent to 0.24 percent, an increase of 33 percent. On the other hand, during that same time, the average savings account yield at internet banks has risen from 0.72 percent to 1.33 percent, an increase of 85 percent. Many well-established internet banks have been raising yields above this average, with a few offering yields above 2 percent. Suffice to say, consumers are losing out if they stick with their long-time brick-and-mortar banks and don't switch to an internet bank. Here are a few easy steps to take to make the switch and start earning more on your deposits. Link to an online savings account Switching to an internet bank doesn't have to be a complete switch. The first easy … [Read more...] about As interest rates rise, it’s time to make more money from your savings accounts