Paycheck Chronicles

10 Minutes to Higher Rates


If you have any money in savings, you have probably noticed that the interest rates that savings are earning right now is abysmal.  While I don't have any great tricks for finding truly spectacular rates, a little effort can pay off with a slightly better than average rate.

Here's what I suggest:

  1. Identify your needs.  Is this money an emergency fund that you will hopefully not need to use?  Is it earmarked for something at a particular time in the future?  How much lead time will you need to access this money?
  2. Pick 3-4 banks.  In the interest of simplicity, you might want to stick with banks you already use, or banks that are particularly convenient or are known to offer good rates.  For example, I bank with Navy Federal Credit Union, USAA, Pentagon Federal Credit Union, and ING online.
  3. Check their savings interest rates.  You can usually find all this information in a few minutes online.  Look at a variety of products, including certificates of deposit, money market accounts, and regular savings.
  4. Choose the right product for your needs.  Don't make yourself crazy unless this is something that you enjoy!  Finding a slightly-better-than-average rate and putting your money in it now is much better than having it sit in a 0.3% account waiting for something great to appear.
For example, we have some money that we are saving for our return to the US.  We expect that to be in about two years.  I found 1.5% on a 2 year CD at USAA, 1.04% on a 2 year CD at Navy Federal, 1.25% on a 2 year CD at Pentagon Federal, and 1.00% on a 2 year CD at ING.  I'm not particularly committed to buying a CD, but they have the best rates out there right now.  If, for example, I had $10,000 in savings, I could earn an extra $50 per year by going with the highest of the CD rates (vs. the lowest rate.)  It isn't a lot, but you might as well earn as much as possible.

*Navy Federal does have a special East Start CD that is paying 3.0%, but there is a limit and we've already maxed it out.  If you don't have this CD, is it s a great deal!  You can open one special Easy Start CD for each Navy Federal member, including kids.

Let me know if you find any amazing deals or offers, and hopefully we can all make the most interest off our savings.

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