Top Interest Rates

By: EconomyWatch Content   Date: 5 November 2009

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EconomyWatch, Content Team

 

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One can maximize the returns from a savings account by getting a savings plan with top interest rates. It is possible to get the highest interest rates with certain types of accounts, which include fixed term accounts, no notice accounts and regular savings accounts. In order to get the highest interest rates, one can compare the offerings in the market with the help of online comparison charts. Let us look at each of these accounts in detail.

Top Interest Rates: Various Options

 

Certificate of Deposits (CDs): Usually called Certificate of Deposits (CDs) with longer term maturities are considered to offer top interest rates. However, when the interest rates are very low and are expected to increase within a year, it is better to invest in short term CDs. When you opt for a short term CD, you have the chance to reinvest in higher-rate CDs later when interest rates rise. Laddering is the process of investing in CDs of different maturities.

No Notice Accounts: No notice accounts (or instant access accounts) do not require an advance notice before withdrawing money. No notice accounts are good for people who need to withdraw cash without notice or limit. Banks tend to offer top interest rates for people who limit their monthly withdrawals to a specified amount.

Online Banks: If you are looking for the highest interest rates with zero risk, you can consider online banks. Usually online banks offer higher interest rates as compared to regular brick-and-mortar banks since they do not incur heavy overhead costs or any other costs normally associated with physical branches.

Regular Savings Accounts: Regular savings accounts require a designated sum of money to be deposited every month. Given the mortgage crisis, savings accounts in general, and regular savings accounts in particular, are offering top interest rates. The draw back is that if you miss a deposit, there will be a penalty. If you can deposit a good sum of money while initially opening the account, you get better interest rates.

When shopping around for accounts with top interest rates, do not make the mistake of looking only into big names. Usually it is the small credit unions and community banks that offer the best interest rates.


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