Cashola

How to get a better interest rate on Savings

There is one sure way to get a better interest rate on your savings account than what you’re getting at your local bank, and it’s ::drumroll:: ONLINE BANKING! These online banks encourage you to put your hard earned money with them by offering high yield interest rates ranging anywhere from 2.6% all the way up to 4.05% APY. So what’s the catch? After a Google search for “disadvantages of online banking”, an article caught my eye: “3 Reasons Not to Use Online Bank Accounts“. Mr. Pritchard’s 3 reasons not to use online banking are:

1. Customer Service with Online Bank Accounts
” One reason to avoid online banks is that you may run into bad customer service. With a brick-and-mortar bank, you’ll likely have some familiarity with the staff”…

2. Online Bank Accounts and Speed of Clearing
“The internet is supposed to make things faster. However, you might have to wait a long time for checks to clear.” and “Likewise, deposits to your online bank account can be really slow. If you get a big check and want to start earning interest, you can expect to wait. Now, the higher APY you earn may still make it worth your while, but it’s just no fun to wait.”
3. You Can’t Spend It From Your Online Bank Account
You can’t take it with you when you go, so why not use some of that money? Online bank accounts make it hard to spend your money. You really have to plan on keeping your money in the account.

Now he may have some valid points, but there is a way to have all the benefits of Online Banking without the disadvantages. Enroll in online banking with the institution you already bank with. I currently have my savings and checking with Washington Mutual. Washington Mutual’s Online Banking offers:

• Free checks for life**
• Free ATM cash withdrawals (foreign and domestic)**
• A $0.03 reward on debit card purchases**
• Free Personal Bill Pay® service
• Safe storage for your stash—deposits are FDIC insured

At 3.30% APY, Washington Mutual offers one of the best interest rates for online banking savings accounts. Tough to beat. So for my rebuttal to Mr. Pritchard’s reasoning:

1. With plenty of brick and mortar Washington Mutual locations throughout the United States, you can readily talk to a teller for any support you may need. I have had some issues concerning my debit and checking account and Washington Mutual had excellent customer service and helped to resolve all of my concerns.

2. The speed of clearing a deposit into your online savings account will be just as quick as depositing into your regular bank account since the accounts are all under Washington Mutual. If you need money, you can simply go to a teller and make a withdrawl or use their Free ATM Cash withdrawl service. The only time I could foresee it being slow in clearing is if you transfer funds to an external checking/savings account with another bank.

3. As mentioned in #2, as long as you have a Washington Mutual branch wherever you are (which you more than likely will), you will have no problem accessing your money. Actually, unless I really needed my money for an emergency, I wish Online Banking would make it harder for me to spend my money. It would help prevent all those head slapping impulsive buy moments.

Oh yeah…Free Personal Bill Pay rules!