How to Maximize Interest on Your Savings

Jacqui Kenyon
Posted

online bankingRemember the days when interest on your savings or money market account actually amounted to something?

These days, interest rates on these types of accounts are dwarfed by inflation: Rarely do they even come close to 1%.

If you’re tired of watching your emergency fund sit dormant at your brick-and-mortar bank, you should consider putting your cash in an online bank account. According to a new survey by MoneyRates, the rates at online banks—while still pretty low compared with times past—are often up to six times higher than those at traditional banks.

Another plus, online banks tend to have slightly better customer satisfaction than their traditional counterparts. A different MoneyRates survey found that the rate of satisfaction at online banks was 86%, compared with about 83% at traditional banks.

So do higher interest, higher satisfaction and lower fees sound good to you? Check out which banks are paying the most in interest by account type below:

  • Savings accounts: Traditional banks are paying an average annual percentage yield of 0.105%, while online banks are paying an average of 0.63%. The report found the highest rates at Ally Bank, American Express, Sallie Mae Bank, Discover Bank and GE Capital Retail Bank.
  • Money market accounts:Traditional banks are paying an average annual percentage yield of 0.154% and online banks are paying an average of 0.661%. You can find the best rates at Sallie Mae Bank, Ally Bank, GE Capital Retail Bank, EverBank and Nationwide Bank, according to the report.