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| *Ostroff, Fair and Company>>>Personal Finance |
Best high interest online checking account.? |
Does anyone know of an online banking site that can beat ING Direct's Electric Orange checking account? Currently their APY is 4%. -Thanks! Hi, Depends on how much money you're holding in that account. Many banks have something called an earned income credit offset feature. Basically, the bank pays a pretty high interest rate on checking. Let's say 4.6%, then every time you use your account for something, the bank deducts money from the interest your earning. The less amount of transactions in that account, the more interest paid. This is one method of getting a decent return on liquid cash if you have a substantial balance. If you do not have a high balance (250k+), then ask your bank if they partner with any mutual fund companies. Any decent mutual fund company has something called a money market fund. The money market fund pays substantial interest while keeping your money liquid. Generally the mutual fund companies use these as holding accounts for rollover funds, but you can use them for what you are looking to do as well. The rates for these funds are generally tied to short term CDs and treasuries which means that thier rates are consistently higher than any checking account around. Just my personal experience, but I'd stay away from these high interest bearing online checking accounts for a while. There is a lot of data mining going on behind these promotions. (Citi is an example of this - Just read thier deposit agreement.) Also you'll see a lot of teaser rates if you watch this stuff. (HSBC is an example of this) The ends really have to justify the means when it comes to these accounts. My advice would be not to chase rates, but look for consistency from your account. A great example of this strategy is to compare the 5-Year high yield money market index vs. any money market fund. The proof is in the pudding so to speak. Due to the inverted yield curve, many banks are offering short term CDs with interest rates over 5%. I would take a good look at these because your money will grow faster if the interest is gaining interest as well. Talk to your bank and see what they recommend. Good luck! http://www.money-rates.com/savings.htm... I thought it was HSBC at 5.5%, last time i saw it http://www.fixthisloan.com Check E-Trade. |
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