Compare high interest online savings accounts to similar products. By  analyzing the offerings of major financial institutions, this provides a complete composite of average rates. Abnormally, high interest rates are usually a warning sign. As with any financial situation, the old adage applies: “If the deal sounds too good to be true, it probably is” — rings true.

Verify the bank’s financial standing.  Banks in the red often use high interest savings accounts to generate new business. In an effort to maintain liquidity, institutions will lure consumers to stockpile cash at a significantly higher interest rate.

Remember that certain banks tempt consumers with substantial returns as the riskier trade off for lacking insurance coverage by the FDIC. 

Check the limits. Some smaller banks, offering high interest online savings accounts, impose caps balance caps  of $50,000 or less.

Fund with an insured high interest online savings account. Circumnavigate any unforeseen monetary damages losses via an high interest online savings accounts. Any high interest online savings account that is not insured by the FDIC is unworthy of consideration.  Customers who maintain accounts with financial institution that are not backed by the FDIC are highly susceptible to the bank’s closure and financial losses. 

Validate contact information. Even if a financial institution’s Web site features the FDIC logo, verify the following information:

•  Address
• Phone number
• Headquarters

 Any high interest online savings accounts lacking the aforementioned information is suspect to unscrupulous business transactions. 

The new-fangled, high interest online savings account with  charge card tendencies. Here’s how it works:

• A minimum deposit of up to $25 is needed to open an account and a monthly deposit of $10 is needed to keep the account active.

• Consumers set a financial target via Smarty Pig’s social network.

• Friends and families can contribute to an accountholder’s “goal,” but there is a 2.9 percent processing fee for the transaction.

• Once the consumer has made their goal, the funds can be transformed into a debit card or gift card via a major retailer or transferred into one of their accounts. Although the online savings account does not charge any ATM, load fees or monthly fees, account holders should expect a nominal charge form the owwer of the automated banking machine.

Smarty Pig promises a sizeable yield. Assessed by West Bank, which is secured by the FDIC, Smarty Pig’s variable interest rate tier system awards individuals with a balance less than 50,000 will earn 2.133% (2.15% APY). However, the high interest online savings account with more than $50,000 accrue only .5 percent.

[According to the online savings accounts terms of use and Truth in Savings the aforementioned rates can be changed without notice.]

• Smarty Pig is totally green in the sense that all bank statements are submitted via email. 

• The high interest online savings account also enables consumer to use their payable on Death (POD) Beneficiary. But, the caveat is that the beneficiary must be over 18 years of age.

As for an online high interest online savings account with socially engaging features to save money, Smarty Pig seems to offer a high incentive.

Let us know what you think about  the high interest online savings accountSmarty Pig.

• Maximize gas mileage, by keeping tires on the proper inflation.

• Shop for a high interest savings accounts, where funds are electronically transferred from the paycheck into the savings account.

• Regular automobile tune-ups can minimize major car repairs, requiring vehicle owners to dip into their high interest savings account.

• The average car wash costs anywhere between $5 and $15. By washing one’s car by hand, that’s more than a $60 savings per year.

• Decrease energy consumption around the home.  By turning down the thermostat five to ten degrees below the normal temperature, actualize a savings of at least 10 percent a year–another savings opportunity with worth an annual savings of $75.

• Using a mason jar or other similar sized receptacle (piggy bank), discard all extra change into the jar. Try to fill up the jar monthly to deposit into the high interest savings account.

• Practice financial prudence by avoiding overdraft fees.

• To reduce the chances of overspending, set a weekly budget that accounts for transportation, food and other personal necessities. Then, store all credit and debit cards in a safe place, alleviating  the temptation to exceed the financial plan. 

• In the end, the only way to maximize savings is by setting realistic monthly goals. Since  high interest savings accounts fluctuate based on inflation, be sure to check the yield of your high interest savings account on a regular basis to assure that you’re attaining the best return on the savings’ investment.  

The high interest savings account tends to give prudent, cynical savers, who prefer pure liquidity, a certain level of security. Despite the FDICs safety cushion (covering accounts up to $250 K insured), the high interest savings account calls for some due diligence.

In an effort to minimize research, consumers will open a high interest savings account at the bank where they have a checking account. The rational seems practical when one considers transferring funds between accounts.

For a household with a savings of $100,000, the high interest savings account makes the most money-wise sense.

The only problem is that banks, such as Chase, have persnickety little guidelines that many consumers overlook until it’s too late.

Since many Americans prefer to do conduct banking at one financial institution, remember to review all the terms.

For instance, some financial institutions will charge a monthly fee, if the checking and high interest savings accounts do not maintain a minimum balance. In example, the minimum average requirement of both accounts is $75,000 at Chase.

Although many brick and mortar banks offer incentives for consumers to maintain both a checking and high interest savings account at the same financial institution, remember to peruse the fine print. As at Chase, when consumers do not conduct any banking transactions within a 35-day period, they run the risk of yielding a lower interest from the “enhanced rate” originally shown with the high interest savings package. (The aforementioned stipulations are just a few reasons consumers must always read financial details in entirety).

Reading reviews and perusing the terms of service of the high interest savings account will save a lot of surprises, frustration and any potential losses in the long run. This article is a review about a renowned, online high interest savings account, who goes by the name of Ally.

(While this article describes the details of the high interest savings account, it is not an endorsement).

About Ally

Ally should not be confused with the American boxer, Muhammed Ali.  Ally is also not the dietary pill (alli), touted as an effective weight loss program. No, actually as an online financial institution, Ally is driven by money. Well, it’s with a bevy of financial products. In particular, Ally’s high interest savings account plan has been the hot pick lately for consumers, looking for a safety net to stash cash.

High Interest Savings Attractive traits/ benefits: With a no monthly minimum or monthly fees, Ally tends to outshine other financial institutions, offering high interest savings. Compared with other banks, Ally’s high interest savings account does not charge fees that are not issued by an employer. Like other banks backed by the FDIC, Ally ensures that deposits up to $250,000 are insured. Moreover, with every statement cycle, customers have six-fee-free transactions.

Unappealing feature(s): Since a good percentage of the population is flummoxed by  which financial products offer the best yield, Ally’s monthly Sleeping Awards, recommending other financial savings’ programs, tend to perplex most consumers.

Ally’s high interest savings mantra: “We work to keep rates high. Other banks tempt new customers with promotional rates.” (Source:  http://www.ally.com/online-savings-account/index.html)

Ally assesses interest…. on a daily basis. With Ally’s practice to compound interest each day, customers have a definitively better return on a high interest savings account that at other financial institutions that assess interest on monthly, quarterly, and annual cycles.

Although the above details, pertaining to an Ally high interest savings account are current as of April 19, 2010, always review all details, terms of services and fine-print to avoid any financial blunders.

As for saving money for retirement, the stock market is not a secure place to build the nest egg. Given the uncertainties of the global economy, money-wise consumers prefer the high interest savings account. Unlike the tax penalties and restrictions associated with making premature withdrawals from CDs (certificates of deposits), the high interest saving accounts doubles as nest egg – emergency fund.  

Amid financial analysts, there is a modicum of contention regarding the big bank versus small and online financial institutions. Individuals familiar with the situation assert that — any savings account under $250,000 is safe at any financial institution long as the FDIC backs it. Others contend that there’s a disparity between the high interest rates saving account from the small banks and large ones.

Many experts argue that the behemoth banks pay lower yields on high interest savings account. For example according to data provided by the FDIC, during the fourth quarter of 2009, institutions wither $100 billion or more of assets paid only .77 percent in annual interest on deposits. In comparison, smaller institutions shelled out an average of 1.73 percent. The 1 percent disparity suggests that larger banks are more apt to reap the financial benefits of being backed by the government.

On the other side of the coin, colossal financial institutions attribute the high interest savings discrepancy on the fact that they have other costs factored into the yield. Dissimilar to the small bank, where ATMs and brands are few and far between, large banks indicate that consumers are paying for the convenience of being able to access funds anywhere.

So when it comes to selecting a bank to open up a high interest saving accounts determine which is more important for your financial situation, an account where you can access the savings account anywhere, or the high interest savings account that yields higher returns.

Have a question about high interest savings account? Please post your questions below. 

While some analysts laud certificates of deposits, there are a few  drawbacks. For instance, a short term CD rate generally accompanies ultra low interest rates, presenting a better return with a high interest savings account.

While a long term certificate of deposit assures an investment return, the accountholder is not supposed to touch the funds for a specified period. Depending the bank, there are specific guidelines and penalties for making withdrawals.

For the frugal saver, who has the discipline and does not mind not having access to their funds for a 4-year commitment, some CDs accompany a higher rate.

Alternatively, if inflation gains traction, maintaining funds in a CD may not be the smartest choice. 

Flexibility is what makes the high interest savings account so attractive. Many certificates of deposits require accountholders to issue withdrawal requests by mail or in person. With the autonomy to withdraw or access funds at anytime, the high interest savings account possesses many redeeming qualities over the certificate of deposit.

• Up to six monthly transactions (includes withdrawals)
• Pure liquidity (an ability to access funds at any time)
• Online banking convenience
• Nominal service fees

Click on high interest savings

Unlike the fixed rate certificate of deposit, which takes longer to mature and does not  have the monthly withdrawal features of the high interest rate savings, some financial analysts recommend a liquid certificate of deposit, where certain funds are d

However, since many high interest rate savings accounts share some of the same features as the certificate of deposit, compare the following: 

• The APR
• The minimum balance requirements
• Transaction fees

For example, Discover card offers both a CD and high interest savings account; however, the APR is a  quarter percent higher on the certificate of insurance than the high interest savings account. Generally, CDs have a higher yield than high interest savings accounts.  

Be sure to compare the high interest rate savings at well known institutions, such as: 

• Discover
• AIG
• American Express
• Bank of America
• Capital One
• HSBC

Additionally, be sure to shop  around for the best high interest savings account. Most accounts include the following features and requirements: 

• Up to $250,000 per depositor, per account Insured by the Federal Deposit Insurance Corporation (FDIC)
• Has a direct deposit
• Allows up to six maximum withdrawals per statement cycle.
• Interest is compounded daily and accrued on a monthly basis.
• Returned deposits  due to insufficient funds carry a $5 surcharge 

Unlike the certificate of deposit (CD), which imposes a penalty for withdrawals prior to maturity of the CD that can ultimately lead to loss of the deposit,  a high interest savings account does not accompany any  of these stringent rules. Nevertheless, the high interest rate savings account is ideal for the consumer, who has the discipline to limit withdrawals.

Consumers, who are shopping for a high interest savings accounts, have a pool of financial resources. From the brick and mortar bank to online high interest savings accounts, there are a slew of savings – investment options. Nevertheless, just as all credit cards do not offer the same benefits, the same is true of high yield savings accounts.

High interest savings, reviewed sevaral popular online accounts. When compared with brick an mortar banks, there were significant discrepancies with the two financial tools;

• Monthly Fees
• Minimum balances
• Promotional rates
• Daily Interest compounding

Transparency. In an effort to entice new customers, many banks offer high interest savings accounts, which are simply promotional . Be sure to review the APY terms of any high interest savings account that you’re considering. For instance, interest daily. Many others compound monthly, quarterly, or annually.

Certain high yield accounts charge a monthly fee; particularly in cases where the deposit is not transferred automatically from the employer.

Depending on the terms of the high interest savings account, instituted by the bank, many have a minimum balance requirement.

All banks have a six-transaction minimum. Since the federal government has set the limit, checks written to third parties, withdrawals and other financial transactions are limited.

Fortunately,  online and brick and mortar financial institutions, do not charge consumers for making deposits.

Click on “High interest savings accounts” to browse additional topics

• Reliability
• Online security
• Good customer service
• The highest interest rates

Is the bank reliable? If you’re shopping around for a high savings account to save and grow your hard earned cash, make sure that the financial institutions is not only financially secure. Investigate whether the bank is on the federal government’s “most troubled bank” list. 

Does the bank provide good customer support? Finding a viable online banking institution rusting the well being of the high interest savings account includes the ability to rely on professional customer service. Given today’s technological independence, certain financial institutions consider voicemail to be the end all be all to quelling consumers concerns. On the contrary, opt for institutions providing expert and reliable customer service.

Does the high interest savings account have the appropriate online safeguards?  Major security breaches have been a growing concern. Since the United States government has been hacked, financial institutions are just as vulnerable. Information security experts contend that individuals who do paperless banking are less prone to identity theft and fraud. Prior to finalizing the high interest savings account, be sure to investigate the online bank’s security statements and provisions. 

Will the high interest savings account pay the dividends it touts? Some banks have a solid history of  offering a high interest rate and overall liquidity. Compare four to five different high interest savings accounts for the highest yield.

Does the financial institution conduct transactions on a virtual capacity?  

Finally, compare brick and mortar branches (i.e. ING and HSBC) fees and service advantages to online high interest savings account services.

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