Here’s another Interest Rate Roundup ordered by highest rate.
Dollar Savings Direct is at 2.65%.
Grand Yield Direct is at 2.50%.
FNBO Direct just dropped to 2.40% today.
HSBC Direct is at 2.25%.
ING Direct Orange Savings is at 1.85%.
WaMu Online Savings is at 1.00%.
I currently have tried and still have all of these accounts open. As I expected, interest rates are falling on online savings accounts as well as traditional bank savings accounts. With the Federal Reserve rate close to zero, it’s no surprise that these rates are falling.
Wachovia does have a special Way2Save savings account that pays 5.00% for the first year! Plus you get an additional match of 5% at the end of one year!
The only catch is that you can only transfer up to $100/month into the account plus every debit card transaction will automatically transfer $1 out of checking into the Way2Save account. It’s still not a bad deal and I actually signed up for it at my local Wachovia (now owned by Wells Fargo). Who knows whether Wells will keep up the program after completing the integration.
If you’re looking for a high rate on your savings, it’s almost non-existent right now. That being said, you really shouldn’t do anything with your emergency fund. It should stay in a liquid savings account of some kind. It’s not there to earn interest. It’s there to protect against emergencies. And you need easy access to it.
I think it’s ok to move it around to maximize interest but you have to calculate the time factor plus lost interest in between switching accounts.
On a side note, Everbank is currently offering a 3.51% interest checking account that’s guaranteed for 3 months, which beats any 3 month CD that I’ve seen without the early withdrawal penalties. It does have a $1,500 minimum opening balance and I haven’t opened yet so I can’t comment on the service.
I’m thinking about opening an account for the high interest rate, but I’m not sure yet. After the three months, the interest rate is tiered from 1.26% (anything under $10,000) to 2.46% (for accounts with $100,000 or higher). If I do decide to open one, I’ll let you know here.