“Hey Dad, do you have an online bank account?”
I absolutely do, kids:
Recently I stepped into my local bank looking to open a new savings account. I was offered a “Platinum Honors” account, that with an account balance of only $2,500 I could earn 0.04% interest on my money. “Wait, did you say 0.04%”, I asked. With a level of enthusiasm in their voice, they said, “with this Platinum Honors Account you get our highest available savings rate”. They then had the nerve to show me their list of fees:
Yikes! With all of that in mind, I’d be better off keeping my money under my mattress.
Understand that after 12 months, my $2,500 deposit, at an Annual Percentage Yield (APY) of 0.04% would grow by $1.00 to $2,501. And any fees that they charge me would leave me with an account balance of less than the $2,500 I started with. They even tell you that in their Disclosures (aka: the fine print); “Fees could reduce earnings on the account”.
Know that there are several quality online banks that are paying well over 4.0%, with a $0 - $100 minimum balance requirement, with NO FEES! “Hey Google!”
CIT Bank is now paying 4.65% Annual Percentage Yield (APY) on their Savings Connect Account, with a required minimum $100 initial deposit. Take that same $2,500 in this account and after 12 months, your account would grow by $116.37 to $2,616.37. Additionally, if you have $5,000 to deposit, you can get 5.00% with their Platinum Savings Account.
Anyone getting 5.00% or better on a savings account, from a quality bank, that is FDIC insured, with no fees, with a low or no minimum balance requirement, should feel pretty good about their banking decision right about now.
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