Where to Find Savings Account Interest Rates Your Bank Can't Touch

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Low interest rates may be great for borrowers, but they're terrible for savers. According to Bankrate.com, the average money market account pays just 0.46% in annual interest while the average interest-bearing checking account pays just 0.56%.

For those keeping score at home, that's less than one penny a year in interest for every dollar saved.

Some big-name banks are paying even less. JPMorgan Chase (JPM), under pressure for nearly $6 billion in losses suffered in its European operations, offers its regular savings customers just 0.01% and its "Plus" accounts 0.05% for balances under $10,000.

With inflation eating up 1.7% of Americans' spending power last year alone, and an average 2.42% annually over the past decade, parking money in either of these accounts -- or, really, any account held by a traditional bank -- is an almost sure-fire money loser.

What to do? Turn to the Internet.

According to DepositAccounts.com, June marked the second straight month of increases in the average rate of Internet savings accounts. Intense competition for deposits has big names such as ING and Ally pitching higher returns.

Why Banks Are Backing Off

Bricks-and-mortar institutions are under too much pressure to match their Web-based counterparts. According to DepositAccounts.com, seven banks and one credit union shut down last month, up from four banks and one CU in June 2011. North Carolina's Waccamaw Bank and its $533 million in assets topped DepositAccount's list of closures.

Meanwhile, ratings agency Moody's last month downgraded its credit assessments of 15 of the world's largest banks. Five American banks were targeted: Citigroup (C), Bank of America (BAC), Morgan Stanley (MS), Goldman Sachs (GS), and -- surprise! -- JPMorgan Chase. Bad loans, poor investments, European worries, interest rate woes, and related worries factor into how creditworthy a bank is deemed to be.

The Internet to the Rescue ... Sort Of

Web-based operations don't usually come with the same baggage, and as a result tend to offer consumers better deals.

The average rate for Internet savings accounts exceeds the average rate of all savings accounts by 45 basis points, DepositAccounts.com reports.

But not all accounts are equal, and most of their interest rates still come up short of inflation. The average Internet savings account paid just 0.675% as of this writing, up 0.2% from last month but still well short of rate of price increases taking purchasing power out of American wallets.

Why have a savings account at all in this environment? Liquidity. Cash can be transferred between accounts with a few clicks or withdrawn any time of the day or night at most automated teller machines.

Three of Better Deals Right Now

For those who insist on having that flexibility but who also don't want to give too much away to the inflation monster, here's a closer look at three of the best deals identified by DepositAccounts.com.

  1. Ally Bank Online Savings. Pays a rate of 0.84% as of this writing -- rates vary according to market conditions -- and requires no minimum deposit to open. Nor are there any monthly maintenance fees and interest is compounded daily. The downside? As with all online banks, your best bet for building a balance is to electronically transfer funds from an external checking account.
  2. ING Direct Orange Savings. Pays 0.80% as of this writing with interest accrued daily and compounded and credited monthly. ING also demands no minimum balance, though deposits are subject to a five-day hold before funds can be withdrawn. The initial account deposit remains on hold for 10 days. As with Ally, ING prefers savers use an external checking account for electronic deposits and withdrawals.
  3. SmartyPig Savings Account. Pays 1.00% annually as of this writing. SmartyPig isn't typical in that the name refers to a program rather than a bank. BBVA Compass is the financier behind the account. SmartyPig itself is a system that rewards automatic saving toward specific goals. Retail partnerships provide cash back bonuses for trading in savings for gift cards.

The lesson? Shopping around isn't just something to do at the mall or the car dealership. Bank accounts may no longer be paying the interest rates they used to, but whether it's through the local bank, prepaid cards, or the Internet, diligent consumers can still find good deals for stashing their rainy-day savings.

Fascinating Facts About U.S. Currency
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Where to Find Savings Account Interest Rates Your Bank Can't Touch

We work for it. We wish for it. We save it. We spend it. We gain it. We lose it. Above all, we need it. Yes, money certainly does make the world go round.

In America, that money takes the form of paper bills (printed by the U.S. Bureau of Engraving and Printing) and coins (produced by the U.S. Mint). However, the coins that jingle in your pocket and the bills you stuff in your wallet today are far different from the ones originally produced in the late 1700s.

As you would expect, over the last 200+ years our currency has seen many, many changes -- both big and small. That's a lot of U.S. money trivia to keep up with! So, WalletPop set out to uncover the most interesting tidbits about American currency and share our favorites with you.

Read our questions and answers to discover 10 fascinating facts about U.S. currency.

                               -By Vicki Passmore

That depends on the denomination of the note. Here are the average lifespans according to the U.S. Bureau of Engraving and Printing (or the BEP):

$1 bill - 22 months
$5 bill - 16 months
$10 bill -18 months
$20 bill - 24 months
$50 bill - 55 months
$100 bill - 89 months

Bills that get worn out from everyday use are taken out of circulation and replaced. Coins usually survive in circulation for about 25 years.

Just under half of the notes printed by the Bureau of Engraving and Printing are $1 notes. In fiscal year 2009, the exact percentage was 42.3%.

Martha Washington is the only woman whose portrait has appeared on a U.S. currency note. It appeared on the face of the $1 Silver Certificate of 1886 and 1891, and the back of the $1 Silver Certificate of 1896.

No portraits of African Americans have appeared on paper money, but commemorative coins were issued in the 1940s bearing the images of George Washington Carver and Booker T. Washington, followed more recently by the release of a Jackie Robinson coin. Paper money does bear the signatures of four African American men who served as Registers of the Treasury (Blanche K. Bruce, Judson W. Lyons, William T. Vernon, and James C. Napier) and one African American woman who served as Treasurer of the United States (Azie Taylor Morton).

The largest bill ever printed was the $100,000 bill; it was actually a Gold Certificate issued in 1934. These notes were used for transactions between Federal Reserve banks and were not circulated among the general public. President Woodrow Wilson was depicted on the bill.

A mile of pennies laid out is $844.80. By this standard, America is about $2.5 million wide, coast to coast.

The Federal Reserve Bank of San Francisco describes what this motto means and how it came into use:

"E Pluribus Unum" is used on many of our country's seals and most of our currency and coins. During the American Revolution, the Continental Congress issued a three-dollar bill bearing the motto, "Exitus in Dubio Est," which translates to "The Outcome Is in Doubt." Despite congressional pessimism about the war, John Adams, Ben Franklin, and Thomas Jefferson proposed the more prophetic motto, "E Pluribus Unum" -- "One From Many." The motto first appeared on the Great Seal of the United States in 1782. The Great Seal, however, didn't appear on U.S. currency until 1902.

The so-called "all-seeing eye" that sits atop the pyramid on dollar bills was included as a reflection of divine providence. This was not the only option that was considered to fulfill that desired theme. A depiction of the Children of Israel in the Wilderness was also discussed as a possibility.

Surprise! Our so-called "paper currency" is actually not paper, but is made of cotton/linen material. It consists of a 75% cotton / 25% linen blend with silk fibers running through it. If it were made of paper, it would fall apart if you accidentally left it in your pants pocket and sent it for a whirl in your washing machine.

As we mentioned before, accidents happen. Fortunately, our "paper currency" is built to take quite a beating. The BEP says it would take 4,000 double folds (first forward, and then backwards) before a note will tear.

According to the BEP, it is. Its website explains: "The BEP redeems partially destroyed or badly damaged currency as a free public service. Every year the U.S. Treasury handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million. Experts examine damaged currency and can approve the issuance of a Treasury check for the value of the currency determined to be redeemable."


Motley Fool contributor Tim did not own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and past columns. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Citigroup. Motley Fool newsletter services have recommended buying shares of Goldman Sachs.

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