These days my browsing history skews towards CNN Money, Fortune Magazine and Bloomberg, rather than Glamour, US Weekly and Perez Hilton. Economics and finance have never been my forté, but perhaps part of turning 25 involves treading into the intimidating realm of personal finances. Truth be told, I never thought this day would come, but I am learning to embrace my new-found knowledge and passion. Out of all the articles I have read and clips I have watched, one quote resonates with me most, and that is: “Never underestimate the power of compounding.”
The beauty of compounding is that while the rest of the world moves on and we continue to live our lives, the amount stashed away in our virtual piggy banks works its wonders with the natural and progressive passing of time. With so many online banking institutions vying for our attention, here are some of my favorite high yield savings accounts on the market:
I have been with Ally for a few months now – and so far, so good. Ally Bank, formerly GMAC Bank, recently exceeded 1 million customer accounts. In October 2012, Money Magazine named Ally Bank one of the best banks in America with one of the best savings account. The daily and year-to-date interest accrued are clear on both web and mobile platforms. However, their mobile interface can be improved, as the app is currently limited to iPhone and not ideal for iPad use. Their customer service line easily connects while logged into their mobile app, and the wait time is usually less than 5 minutes. At 0.85% APY, Ally Bank is no longer in the 0.95% APY range it was at before, but it is still a competitive online banking option. And is it just me, or does the rich hue of the color purple seem trustworthy?
Barclays is fairly new to the online savings game in the United States, but its interest rates are currently one of the best on the market. With a 0.90% APY, it’s difficult to beat when the competition ranges around a stagnant 0.75-0.80% APY. However, according to Consumer Commentary, low-interest rates are “normal tactic for a bank that’s currently in a stage where it wants to generate deposits and new customers. Some banks offer competitive rates for a short time, enticing new customers, only to later lower the rates to be more like brick and mortar banks.” Friends who have switched over to Barclays say what the online bank is relatively basic, save for its highly competitive interest rate. It will be interesting to see what comes from Barclays in the coming months and years.
Capital One 360 Savings, formerly ING Direct, was my first high yield savings account. Though rates have dropped since Capital One’s acquisition of the infamous orange ball, I still maintain my account because of its versatility. Personally, I find that the ease of use lies in the fact that my Capital One Savings account connects with my Capital One Checking and Capital One Share Builder accounts. As a result, transferring money from one sub-account to another is simple and most importantly, instantaneous. Another feature I am quite fond of is the capability of sending friends referrals and receiving a bonus if signing stipulations are met. In all honesty, this is one of the main reasons why I still maintain my Capital One 360 Savings account. After all, friends don’t let friends settle for mediocre interest.
So there you have it – the ABC’s of high yield savings. It’s easy as ABC, as simple as 1-2-3!