Are you investing for the short term like to buy a car or take a vacation next year? Are you investing for the long term such as retirement in 20-25 years? Why are you investing is one of the most important questions to answer. If you are saving for the short term, then here are 4 ways to find the best interest rates. There are some good deals out there if you know how to look for them. As a reminder, you will not get high interest rates on your savings accounts. But a little extra interest from a bank or credit union can add up over time.
1. Research the top rates
You can’t earn the best savings account rate if you’re not sure what the top rates look like. That’s why you’ll have to do your research. Know what the market looks like. What are the competitive rates? What is the national average? You will know you have found a good offer when the rates are above the national average.
2. Look at your bank as well as other financial institutions
Your bank is most likely not paying a top savings account interest rate. You will have to comparison shop and check other financial institutions for a better yield. As you research options, comparing savings account rates is essential. Compare banks, to credit unions to online banks. Once you find the top rates, you will have to decide if having to deal with several different banks is worth the trouble. There are a lot of logistics involved in dealing with multiple banks. Before you sign up with a different bank, weigh the pros and cons.
3. Bring more money to the table
Banks often tier their rates and reward customers who open new accounts with at least $5,000 to 10,000. You may not be able to get the best rates if you only have a little to save. But if you’re putting too much money in a savings account; like $100,000 or more invest some of those funds elsewhere to earn a better rate of return.
4. Read the fine print
In order to get the best savings account rate, you may have to maintain a minimum balance and meet other requirements. Some of the best savings account rates may be temporary. You could open a new account only to find out months later that the high yield no longer exists. Banks with these teaser rates do not have a good history of offering great interest rates once the promotion expires.
For your short-term goals, it is best to focus on saving rather than investing. This plan will protect your money and lower your risk from market volatility. Do your research to find the best location and rates that fit your banking and saving needs.