How to Get the Best Savings Interest Rates?

Answer 1

Due to the poor economy the federal government has kept key interest rates at historically low levels. While this may be a great way to encourage people to borrower money and spend it on goods and services, it has made interest rates on savings and checking accounts very low. While those rates are very low, there are ways that a consumer can receive a better rate.

One effective way to get a better savings interest rate would be to deposit more money into the account. While rates on savings accounts are lower than their historical averages, banks today have been placing a greater emphasis on attracting consumers who have the money to open significant deposit accounts. If you have the ability to open an account and maintain a balance of $50,000 or more, you could receive a much better interest rate than you would receive if you had a smaller balance. However, in order to avoid penalty you will need to keep at least that amount in your account at all time.

If you are hoping to get a better rate on a savings account, you could also benefit by setting up some form of direct deposit into the account. While direct deposit is not as common with a savings account than it is with a checking account, many banks like to offer better rates to customers who some form of a direct deposit into the account. Most employers will allow you to deposit your paycheck into more than one account. By directly depositing even a small portion into your savings account, you could qualify for an account which pays up to 0.25% better than a traditional savings account.

While you could get a better rate by either holding a larger balance or setting up a direct deposit, the best way to get the best savings interest rates would be to constantly look for new promotions from competing banks. In an attempt to encourage new customers to deposit money, many banks offer promotions that include receiving a higher than market rate on a savings account. By taking advantage of these promotions, you could end up earning a significant amount of more money in interest income.