Earn More Money with Internet Banks
If you are keeping your money in a traditional brick and mortar bank you may be losing out on your interest rate. Let’s face it; in today’s economy, with low interest rates the traditional banks are paying almost nothing for savings accounts. Bank of America’s Regular Savings is currently paying 0.20% APY (Annual Percentage Yield), Wells Fargo Goal Savings 0.05% APY, while the national average is 0.24% APY.
Surprisingly, if you move your money to an online bank, you can earn up to 2.5% APY. That is a big difference! If you had $10,000 with an online bank for 1 year at 2.50% APY, you’d make $253 in interest. If you had the same amount in a traditional bank at 0.24%, you’d make only $24 in interest for the entire year. That’s a difference of $229. As you can see, you’ll earn a lot more with an online bank. Over several years that can really add up! Additionally, the online banks have higher paying CDs than the traditional banks.
The reason online banks pay a higher interest rate is because they have a much lower overhead than the traditional banks. Most don’t have actual buildings, TMs, tellers, or debit cards, and most offer no check processing, etc. Keep in mind some Internet banks are divisions of traditional banks. Also, with the Internet, online banks can be completely automated, requiring very little human intervention. Computers pretty much run the business.
Traditional Bank Linked to Online Bank
I currently have a checking account with Bank of America in which I keep enough money to pay my bills. The checking account is linked to two online banks where I can easily transfer money back and forth. The two online banks that I use are INGDirect.com and EmigrantDirect.com, which I highly recommend. INGDirect.com recently started offering additional services such as a debit card, checking account and free access to ATMs. EmigrantDirect.com doesn’t offer these services as yet. There are a few other good internet banks you can check out, which include Bank of the Internet, Etrade.com, WTDirect.com, and HSBCDirect.com.
So go ahead, do some research and open an account with an Internet Bank and get a higher annual interest rate.
Other Interesting Posts
|
Join |
|
& get new posts delivered to your in-box! | ||||||
|
||||||||
