I don’t know about you, but I know when I have a lot of money stashed in my savings account that is easily accessible through my bank debit card, I get attempted to use it (especially when J. Crew has a sale!).
When I officially began saving for my emergency fund I was just putting money into my savings account at my bank. However, when I found out that the current annual percentage yield (APY) was a pathetic 0.05% I decided to look at other options to put my money to use! If my money is going to sit in my account (hopefully for a very long time) until I have an emergency and need to use it, I want it to earn the most interest that it can.
Ever since the US economy began to collapse in 2008, the APY for savings, money markets and CD accounts have been crap through just about every bank. Through my research and determination to make the biggest bang for my buck (pun intended), I decided to go with an online bank.
I liked the idea of an online bank because
- I couldn’t access it as easily so the temptation of using that money wasn’t there
- I could earn over 90% more for every dollar in my account
- I can set up automate transfers from my checking account to my new savings account
- I can transfer money out of it relatively quick (~24-48 hours) if and when I need it
The online bank with the highest interest rate today is Barclays Bank at 0.90%. Barclays is a British bank, but recently expanded into the US. Barclays is FDIC-certified, meaning that the US government insures deposits in banks for up to $250,000 per depositer per bank. All Barclays online accounts have no hidden fees, no minimum balance to open, and is secure and accessible 24/7. An APY of 0.90% is the highest you’ll find in any bank currently in the US. And to make things even better, you can open a Dream Account and earn 0.95% APY. To earn the extra 0.05% a year, you need to make six consequent monthly contributions of any amount (must be less than $1000/month) six months in a row and make no withdrawals in that six month timeframe. I have both my emergency and tax fund in a dream account.
To open a savings account with Barclays, go to their website.
Today, I received an amazing opportunity with Capital One 360. Many of the personal finance bloggers I read use Capital One 360. If I didn’t like Barclays so much I would have opened my E-fund account with Capital One. However, I when I checked my Mint.com account today I was alerted about this awesome incentive with Capital One 360. From today through Thursday July 3rd, if you open a Capital One 360 account with a minimum deposit of $500, Capital One will give you $76! The APY for the Capital One 360 savings account is 0.75%, which is still one of the highest in the country! Capital One 360 is also FDIC-insured, so you can have a piece of mind about your money.
If you’re looking for a little more of a bonus, you can open a 360 Checking account and earn $100 by making 5 purchases with your debit card within 45 days. You earn 0.20% APY on deposits up to $49,999 and the account is fee-free.
I decided to open up a 360 Savings account and earned the $76 immediately (but I can’t withdraw that $76 until 30 days) by transferring my travel fund from my current bank savings account (where I’m only earning 0.05% APY). The $76 and the greater APY will make my travel fund grow even faster! That means I can travel longer.
If you’re interested in opening a Capital One 360 savings or checking account (which you should because who doesn’t love FREE money!!), then please use this link – Capital One 360 Financial Independence Days Sale! <— Note: This is an affiliate link. If you click and use this link I make a few dollars. Those few dollars can help me travel longer so I can write more travel articles and show you more pictures of amazing places! Thank you!