Americans Could Earn Billions More in Interest: Here’s How

Interest rates on savings accounts are rising, and Americans could earn billions more each year. Online banks offer the best rates, making it easier than ever to switch to a higher-yielding account. Here’s a look at the best rates today, the different places to stash your cash, and tips on making the switch.

Why You Should Switch to a High-Yield Savings Account

The Federal Reserve began aggressively raising rates in 2022 to slow inflation, which has resulted in a welcome change for savers. As a result, 12-month CD rates have increased from 0.14% to 4%. Despite this, Americans missed out on $42 billion in interest payments during the third quarter of 2022, according to a recent analysis in the Wall Street Journal. This is because many people keep their money in traditional savings accounts instead of high-yield ones.

The Fed is expected to hike interest rates a couple more times this year, which will continue to push interest rates on savings accounts higher. This makes it more critical than ever to ensure your savings are in the best possible place.

Types of Savings Accounts

A checking account is often the first stop for your paycheck and is a great place to keep the money you need for monthly bills and daily purchases. However, leaving too much money in a checking account isn’t a good idea, as it won’t help you build wealth, and the money is easy to access, so you might be tempted to spend it. This is why you should park money you won’t pay immediately, like an emergency fund or down payment, in a savings account.

Savings accounts come in various forms, including traditional savings accounts, money market accounts, and certificates of deposit (CDs). Traditional savings accounts are the most common and usually offer a low-interest rate. Money market accounts are similar to savings but may provide higher interest rates. Finally, CDs are identical to savings accounts but require you to commit money for a fixed period to earn a higher interest rate.

Where to Find the Best Rates

Online banks offer the best rates on savings accounts and CDs, so it’s worth shopping for the best deal. The best online banks offer interest rates of up to 4% on savings accounts and up to 5% on CDs. It’s also essential to look for banks with no monthly fees or minimum balance requirements. Some online banks also offer bonus rates for new customers, so it’s worth comparing rates to find the best deal.

Making the Switch

Switching to a high-yield savings account is easier than you think. All you need to do is open an account with an online bank and transfer your money into it. Most online banks will let you transfer up to six monthly transfers, so you can easily switch your savings to a better-paying account. It’s also essential to ensure you are not locked into a long-term CD, as you may be at a better rate by switching to a shorter one.

Related Facts

• Interest rates on savings accounts are expected to continue to rise in 2023.
• Online banks are offering the best rates on savings accounts and CDs.
• Switching to a high-yield savings account is easier than you think.

Key Takeaway

Interest rates on savings accounts are rising, and Americans could earn billions more each year. Online banks offer the best rates, making it easier than ever to switch to a higher-yielding account. It’s essential to shop around for the best deal and ensure you’re not locked into a long-term CD. Making the switch is easy and can help you save money and build wealth.

Conclusion

With interest rates on savings accounts rising, ensuring your money is in the best possible place is essential. Online banks offer the best rates, so it’s worth shopping for the best deal. Making the switch is easy and can help you save money and build wealth. It’s time to take advantage of the higher interest rates and earn more on your savings.