Boost Your Savings Account

One of the slowest investments is a savings account. Oh, it’s an investment. You just don’t think of it that way because it happens to grow at such a snail’s pace. But it’s an investment. If you want to boost your yield (and you should want to!), you should take a different approach. An online savings account can give you one of the safest investments, and quintuple your annual percentage yield.

Online savings account

When you go to a traditional brick and mortar bank and open a savinga account, the pitiful return seems hardly worth it. Less than 1%. But if you go online, sometimes even to the Web site of that same bank, you will find that you can open a savings account with a 5% annual yield. That’s much better.

However, you should be careful when opening such accounts. You want to make sure you are dealing with a reputable institution, and you should realize that the bank will probably mail you documents that need to be signed and returned before the online savings account can be opened. And read the small print. The Citi online savings account (which I have) requires that you have a free checking account linked to it (it actually turned out to be quite convenient). I have to maintain a minimum of $500 between the two in order to avoid a fee. There are online savings accounts that do not have these restrictions (I think ING is one of them).

While the online savings account is going to replace your retirement account, it does make a rather handy way to build up an emergency fund that is readily accessibile while getting a larger yield.