This Mistake Can Lower Your Savings Account Returns by 454 Percent


By Karla Bowsher, Money Talks News

With eight Federal Reserve rate hikes in the past couple of years, banks are finally raising interest rates on savings accounts. You might not have noticed this trend if you still use a traditional bank, though.

In fact, refusing to consider moving your savings to an online bank can cost you a lot of money.

While interest rates have risen at both brick-and-mortar and online institutions, they’re a whopping 454 percent higher at online banks than at traditional banks, according to Ken Tumin, founder of DepositAccounts.com.

He reports on CBS MoneyWatch that over the past two years, the following increases in the average annual percentage yield (APY) have been seen:

    At banks and credit unions (the vast majority of which are brick-and-mortar institutions), from 0.18 percent to 0.24 percent
    At internet banks, from 0.72 percent to 1.33 percent

If you do a little research, you can gain even more. One shortcut to finding the best interest rate for your money is to use a free online resource like Money Talks News’ savings account comparison tool.

Tumin notes that some online banks offer APYs of as much as 2 percent.

“Suffice to say, consumers are losing out if they stick with their longtime brick-and-mortar banks and don’t switch to an internet bank,” he says.

It's not the usual blah, blah, blah. Click here to sign up for our free newsletter.
Why online banks can offer more

Online banks, also known as internet banks, don’t operate branches, which is key to the financial advantages they tend to offer customers.

As we note in “10 Tips for Finding a Bank With More Bang for Your Buck”:

    “They don’t need to maintain a network of brick-and-mortar branches, so their expenses are lower, which can mean they pay higher interest rates and charge lower fees.”

Still, a lot of people are unaware that switching to an online bank is an easy way to dramatically boost their returns.

A recent WalletHub survey found that 62 percent of people do not know that online-only banks offer higher interest rates and lower fees than their brick-and-mortar counterparts.

If you’re worried that internet banks are not as safe as traditional banks, fear not. Money Talks News founder Stacy Johnson explains why in “2-Minute Money Manager: Are Online, Internet-Only Banks Safe?“:

    “I get this type of question a lot: ‘Are online banks safe?’ Short answer: Yes, online-only banks are safe, providing they have FDIC insurance. The Federal Deposit Insurance Corp. is what insures bank accounts. Taxpayer dollars support the FDIC. So, if a bank has FDIC insurance, your accounts are insured up to $250,000.”

To find out whether a banking institution is FDIC-insured, search for the bank using the FDIC’s free BankFind tool. It will tell you whether the institution is actively insured and related details.

For more tips, check out:

    “5 Simple Steps to Painlessly Switch Banks“
    “Consumers Say These Are the 3 Best Online Banks“

Have you ever used an online bank? Tell us about your experience below or on our Facebook page.

COMMENTS





Name

Business,743,Careers & Education,3,Investing,14,Markets,10,Money,4,Personal Finance,4,Real Estate,4,Small Business,15,
ltr
item
Business - U.S. Daily News: This Mistake Can Lower Your Savings Account Returns by 454 Percent
This Mistake Can Lower Your Savings Account Returns by 454 Percent
https://4.bp.blogspot.com/-V13AihYG0sc/W86-4pSovTI/AAAAAAABFNM/3VKK5FibG7oqAOq1hVqMXIYM1EomU3rMQCLcBGAs/s1600/3.jpg
https://4.bp.blogspot.com/-V13AihYG0sc/W86-4pSovTI/AAAAAAABFNM/3VKK5FibG7oqAOq1hVqMXIYM1EomU3rMQCLcBGAs/s72-c/3.jpg
Business - U.S. Daily News
https://business.dailynews.us.com/2018/10/this-mistake-can-lower-your-savings.html
https://business.dailynews.us.com/
https://business.dailynews.us.com/
https://business.dailynews.us.com/2018/10/this-mistake-can-lower-your-savings.html
true
8288295252483019008
UTF-8
Loaded All Posts Not found any posts VIEW ALL Read More Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share. STEP 2: Click the link you shared to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy