페이지 정보작성자 harvard 댓글 0건 조회 2,375회 작성일 10-10-22 08:54
Don't lose ground to inflation or taxes by letting your money languish in a big traditional bank. Now you can do better on savings, CDs and even checking.
Banks really, really, really want your money. And that's good news for savers in an otherwise dismal interest-rate environment.
"Banks are still very hungry for consumer deposits," said Greg McBride, a senior financial analyst for Bankrate.com. "They're keeping returns high relative to where they are in the rest of the economy."
You won't get the best rates leaving your money in a traditional big-name bank, however. As ever, scratching out decent yields means shopping sites such as MSN Money, Bankrate.com (for the best CD and savings rates) and Money-Rates.com (for rewards checking).
You'll find the biggest deals at small banks and credit unions. And you'll need to be willing to cope with some limitations. Among the best deals out there are rewards checking accounts, which have numerous restrictions for users but have picked up speed as banks' need for money has grown.
You may be asking yourself: Why bother? With rates so low, does a percentage point or two really matter?
The answer: probably. If your money is sitting in a traditional savings account, earning less than 1%, you're losing ground to inflation and taxes. Working to get a better return can help you preserve the purchasing power of your money, even if it won't make you rich. You might even get ahead a little, now that the inflation rate has dropped precipitously.
"You're better off earning 3% with 1% inflation," Bankrate's McBride said, "than you were earning 4% when inflation was 5%."
Yield isn't everything
As you hunt for better yields, keep the following in mind:
- Safety still matters. Some of the banks offering the best yields are financially strong -- and some aren't. The risk is minimal if your deposits at any bank are below the $250,000 guaranteed by the Federal Deposit Insurance Corp. If you're depositing more or you're concerned about hassles should a bank fail, you can use rating systems such as Bankrate's Safe and Sound to check an institution's relative strength.
- Fees deplete your returns. Try to avoid fees of any kind, particularly the monthly maintenance fees some banks charge when accounts drop below certain levels. Make sure your account stays above your bank's minimum, or, better yet, find a fee-free account. Many banks offer high-yielding accounts with no fees or minimum balance requirements.
- Don't lock yourself in. Right now, locking up your money for longer terms doesn't get you much more yield, a sign that interest rates are expected to stay low for a while. Several banks offer 4% rates on five-year CDs, only slightly above the top rate for a one-year CD. Go for the longer yield only if you're convinced rates will be lower when the CD matures. Otherwise, consider laddering your savings -- choosing CDs of different yields so you can take advantage of future rate increases without exposing your whole cash stash in case rates drop.
- Mind the fine print. This is particularly true for rewards checking accounts, which typically require users to have direct deposit and make a certain number of debit card transactions every month. Also, where you live matters: Many of the banks and credit unions offering rewards checking restrict the accounts to state residents.
Why savers are suddenly attractive
Why are banks so hungry? Two reasons:
- Bad loans. Capital losses from bad mortgages and other loans mean many banks need to build up their reserves. To do that, they need your deposits.
- Scaredy-cat investors. Banks used to be able to sell most of the loans they made to investors and then use the proceeds to make more loans. With skyrocketing defaults, investors have gotten much pickier, making loan sales an expensive way to raise money. It's cheaper to get more deposits from savers and lend that money.
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