If you have a savings account from a traditional bank (i.e. Bank of America, Chase, Wells Fargo, Citizens Bank, PNC, etc) you probably have an interest rate around 0.01% to 0.10%. What does that mean? Well if you have $10,000 in your savings account, that means in 1 year you will earn the following income based on your interest rate:
If you ask someone from the 1990’s if this is a good interest rate for a savings account they would laugh in your face. In the book The Automatic Millionaire, Expanded and Updated: A Powerful One-Step Plan to Live and Finish Rich, the author David Bach, recommends utilizing the interest rates from saving accounts to become a millionaire. With a rate of 0.10% that is practically impossible and your actually losing money each year due to inflation.
At the time of this post, there are banks out there that have interest rates above 1%. With the recent rate hikes from the Fed, interest rates slowly increased over the last year. Interest rates for car loans, student loans, mortgages, etc increased, which negatively impacts the end consumer, making things more expensive. However, there is a positive that comes with a rate hike. High yield savings accounts are popping up from banks that operate solely online. By reducing their costs they are able to have high-interest rates for their customers. Several banks are now offering savings accounts with interest rates over 1.00%. Compare the list below to last year’s post and you’ll notice interest rates increased about a quarter percentage point.
In addition to the banks listed above, there are others with high yield savings accounts that you can find searching on google.
The goal here is to find a savings account with a high yield that suits your needs and start earning money on your savings asap. The sooner you take action the more money you will earn so start today!