I admit that we do have more cash on hand than most investment advisers would say we need, but I would like to move in the next year or so, so I am saving a lot. So this money that we have is our emergency fund and a general savings which would total probably close to 10 months of must have expenses. I should really know exactly what our expenses are, but I have not calculated the total lately since some significant life and financial changes.
So, once I got the idea that there was a better option out there, I had to begin my research. We all know where that leads. After a good old Google search for high interest savings, there was a multitude of good information. Low and behold, one of the top suggestions was an article on one of my regularly read sites, The Simple Dollar had an article about their best savings accounts of 2015. I thought it was a well written article that gave pretty solid info about the various providers. It included info regarding the interest rate offered, minimum balances, fees, and any other aspects that set the provider apart from the pack. Often times I see the interest rate fluctuates slightly based on the added options that they offer. Less options usually means higher rate. Translation, the more options means it costs the provider more.
After reviewing the article I decided to visit a few of the individual sites and see for myself what I liked about it.
Capital One 360: This was the first site I visited. They offered a rate of .75% which was the lowest of the options I looked into. They also offered a tiered reward based on the amount of your initial deposit. The bonus started with deposits of $5000 and reached the highest tier at $50,000. The actual bonus was from $50 to $500. All in all, nice to offer the bonus, but over the long haul it would not take me long to get more than that bonus with a higher rate. The best feature about Capital One 360 is the ability to have separate "mini accounts" I will call them within your main account. This is a great option to divide your money among the various savings goals you have.
Ally: The Simple Dollar actually rated Ally as the best overall savings. This was in part due to the high savings rate they offer of .99%. Well above the Capital One option. Another big aspect of Ally getting the highest rating was the online offering. The site is very user friendly and also offers mobile options. There was no minimum deposit or monthly fee. Interest is compounded daily to help you grow faster.
Others: I also looked at the Synchrony option as well as Discover and American Express. These all offered rates close to the 1% with various combinations of minimum balances and monthly fees. Overall they were very similar in offerings.
In the end I decided to go with the Ally financial savings account. I am a big fan of ease of use and do not like a very busy website to navigate. They also have the option to deposit checks using a mobile device, which I like to do.
As I mentioned in the beginning this decision to get this account was in an effort to grow my money more quickly. That being said, a savings account growing at .99% is not going to do a lot to create log term wealth for me. That means I now need to look into other options to create long term growth. I have heard various things about brokerage accounts and ETFs, but I am not knowledgeable enough on those to make that move yet. Look for that post in the future.
