In the wake of the 2008 financial collapse, the cost of living around the world can seem prohibitively high. Property prices are soaring and inflation is steadily rising. These things can conspire to create a cost of living that makes it harder than ever to save for the future or the rainy day that we hope will never come. Your parents no doubt told you all the time when they were growing up about how important it is to save. Unfortunately, they likely inhabited a far friendlier financial climate than the one many of us currently endure. Nonetheless, it’s not enough in today’s financial climate to save; it’s choosing the right savings account that will determine whether you sink or swim when times are hard. While we pray that a financial rainy day will never come, we should nonetheless prepare for it, lest it be allowed to decimate our finances.
Hope for the best, prepare for the worst
You work hard, you play hard and your quality of life is pretty good. Your job is a lot of hard work but it pays well and affords you a fairly lavish quality of life. You don’t save as much as you should (or even at all) but life’s going pretty well so you probably don’t feel the need to.
But what if you’re injured at work? What if you fall sick? What if you’re sideswiped by a truck on a wintry road on the way to work? Even if you’re lucky enough to emerge with your life, you’re statistically likely to be seriously injured by the ordeal and you’ll need time away from work to recuperate and deal with your truck accident lawyers. A savings account with a healthy interest rate can prove a useful buffer in these troubled times. But here’s the thing…
Most, but not all savings accounts suck!
Interest rates from commercial banks aren’t what they once were. In fact the average interest rate is somewhere between an anemic 0.01% and 0.06%. Unless you have a whole lot to deposit, you’re not going to make meaningful gains on interest rates like those. If only you could score an interest rate in single figures, right? Well, you can if you shop around.
The only way is online
Online banks don’t have expensive overheads like premises costs to worry about, nor do they need to employ as many members of staff. This means that they can pass the savings on to the consumer. Here are some great savings accounts from reliable and trusted banks…
- American Express High-Yield Savings Account- Some higher yield accounts have prohibitions like a minimum deposit amount or monthly fees. This has neither but offers an attractive 0.85% APY nonetheless.
- Sallie Mae Money Market- Again, this account has no monthly charges nor minimum deposit but it offers an APY of 0.9%. Now we’re getting somewhere.
- Barclays Online Savings- This offering from UK bank Barclays also offers 0.9% interest while also allowing you to link it to your accounts from other banks.
- Palladian PrivateBank Online Savings- This is the Daddy. It offers an APY of 1 whole percent! The downside? It requires a minimum deposit of $10,000 but unlike other accounts, interest will still be paid if your funds dip below this amount.