SAN ANTONIO – If you have money sitting in a savings account, now is a good time to help it grow.
“Savers are in a position to benefit from this high-rate environment,” said Greg McBride, Bankrate’s chief financial analyst. “We’re seeing the best yields we’ve seen in 15 years on things like savings accounts and certificates of deposits.”
High-interest rates affect more than your credit cards and car loans. There’s a flipside. Banks’ competition means many are now paying you more to hold your savings.
Apple launched a savings account program backed by Goldman Sachs. You do have to have an Apple card and phone.
“The rate of return at Apple is attractive, 4.15%, but there are 20, literally, 20 that pay more than that and are at federally-insured financial institutions nationwide,” McBride said.
Many online banks, in particular, are now paying 4.3 to 4.5 APY. Some even pay as much as 5%, though there are generally strings attached, such as minimum balances or fees.
So what does that mean in dollars? If you moved $10,000 into a savings account that pays 4% more than you’re getting now from your bank, in one year, you’d have $400 more.
Even if your savings is $500, you’d still earn $20.
“If you saw a $20 bill laying on the sidewalk, you would bend over and pick it up,” McBride said. “This is even easier than that because there is no back pain involved.”'
You can find high-yield savings accounts being offered by FDIC-backed institutions by visiting websites such as Bankrate.com and Nerdwallet.com.
Another savings option is a certificate of deposit, or CD. It earns interest for a fixed period of time. Some of the longer-term CDs are paying more than 5% APY. Remember, though, there can be penalty fees for early withdrawal.
“This is the time to lock in on CDs because interest rates aren’t going to be better on those longer terms,” McBride said.
The bottom line -- when it comes to where you keep your savings, it pays to shop around.