Finding the best savings rates that will bring the highest return on your money can be a challenging endeavor. It seems that every time one reads the news, it is detailing yet another type of vehicle or the changing terms of old, tried and true products.
One long-trusted savings scheme, dependence on brick and mortar facilities, has in fact fallen into disfavor among those in the know. Taking savings into a bank building generally means you will be receiving among the poorest rates of return on accounts that are covered by the Federal Deposit Insurance Corporation (FDIC).
Instead, experts recommend that consumers look into online credit unions and banks. Many of the best rates can be found coming from names that are obscure and unfamiliar to savers—at least for now. Other vehicles that at first may seem equally unlikely, such as prepaid debit cards, can be a source for excellent savings rates. However, they will require that the investor do their homework and use a bit of imagination.
Thanks to the savings afforded by operating on the Internet, online banks are able to offer their customers some of the most generous yields on savings accounts available. They can operate without the expense of maintaining a network of brick and mortar locations, so they can pass the savings from a lower overhead on to clients.
Saving online also frees the customer from feeling they have to accept what local banks may offer. They are able to search online for the best rate from financial institutions that may be headquartered anywhere. Some are well-known, such as Capital One 360, but others will have names not yet familiar to the general public.
Though savings rates frequently change, most online banks now are offering rates of between 0.75 percent and 0.95 percent. Discover is at 0.95, with Ally Bank coming in at 1 percent. However, Synchrony Bank, which is not yet a household name, is offering an impressive 1.06 annual percentage rate with no minimum deposit required.
Some of the best savings rates available today, oddly enough, come from prepaid debit cards. Many offer rates of five percent or more, and they generally are protected by FDIC. Again, it is not always the well-known names that pay best. Mango offers the highest at six percent on a $5,000 maximum balance.
A limit on deposits is one of the limitations of the prepaid debit card. Another is that customers must sign up for direct deposits.