Best Online Savings Account | High Interest Rate, Stability, Service
What factors might enter in your decision to take less than the highest yield available?
- Is the bank a member of the FDIC? If not, skip it
- Did the bank or its parent company receive TARP money in the bailout?
- If so your funds could be temporarily unavailable should the bank come under distress again – FDIC or not! - Is the bank owned and operated in the United States under U.S. Law?
- If not your bank and accounts may be subject to laws and restrictions of other jurisdictions - Does the bank or its parent operate other much riskier lines of business?
- If so failures of those business lines could potentially impact YOUR funds availability
Bank failures aren’t supposed to happen that often, but it seems that about every ten years or so the financially elite so badly mis-manage their businesses that suddenly one bank collapses and takes a bunch of others with it. We’re coming to the end of one of those periods now. The major collapse was Lehman Brothers last September, which has had fallout effects at banks around the globe. While much of the time most savings banks are safe, this is not one of those times.
A Best Online Savings Account Setup Might Look Something Like This:
The Way It Works:
You deposit money in your local account, preferably by direct deposit from your employer. You then establish an online bank account with a reputable savings bank online, then setup transfers between the two using the online bank system to initiate any transfers. Online banks’ electronic transfer systems are usually much more robust than your local bank’s – so use the online bank system for everything instead. This setup frees you to have pocket money to spend and access via local ATMs without fees from your local bank, while at the same time getting at least something in return for your spare emergency cash.
Best Way of Keeping Tabs on Your Online Accounts:
In a word or two: basic financial software on your PC or Mac. Online accounts make it a priority to function well with all the latest and best of breed financial software packages such as Quicken from Intuit and Microsoft Money. Both are excellent home financial programs and I’m more than happy to recommend using either of them. Personally I have been using Quicken since around 1991 – I’m not even sure when it came out originally but I believe I was using a DOS based version. Things have changed quite a bit since then – for the better!
Good Financial Habits and Skills Are Fully Transferable to Your Children:
I can’t stress it enough to all the parents I talk to about money troubles. Inevitably it comes down to knowing what you have, tracking things carefully, and eliminating impulse spending. Do you really need a $4 cup of coffee from Starbucks? In my town the best cup of coffee costs $0.35 and it’s available courtesy of the local hardware store. Making good choices frees up cash to move into non-immediate emergency funds savings account. This is a lesson that could be very valuable to children later on, as they watch and learn how you manage your household and learn to do the same in theirs later.
