Tag: high interest savings

Online Banking Service- Is it for me?

When was the last time you walked into your bank?

The reality is that most of us already do all of our banking online. Most traditional banks offer automated bill pay, deposits, and transfer capabilities online. You can easily download statements and print them anytime you need. You can easily take a picture of your check and have it deposited automatically via your phone. It’s not a whole lot different from online banking.

When was the last time you called your bank?

Did you notice that the call was picked up by a call center in another state or country? This is the reality of banking today. Very few people find a reason to ever actually visit their bank except to use the ATM without incurring fees.

Today, most services provided by traditional banks are available online. But whether or not you want to completely move to an online bank will really depend on your personal banking needs.

Online Banking?

Pros

  • High yield interest rates.
  • Socially Responsible banking options.
  • User friendly web interface.
  • Low or no fees.
  • 24/7 access.
  • Low or no ATM fees.

Cons

  • No option for a face to face encounter.
  • May need to link an account to fund initially.
  • You will need to ask yourself some straight questions about what services you need.

What kind of account do you need?

Checking Account

If you primarily use your bank for a checking account, online banking could save you tons of money in fees. In addition, online banks have less overhead, which means they don?t have to pay for a building and all its expenses, they can offer better interest rates than a conventional bank. For example, The Aspiration account, offers free ATMs around the world, and up to 2.00% APY Interest on all of your deposits. If you are only using your bank for a checking account, moving to an online bank can not only save you money, it can make you money.

Here are a few online account options. Bonus:? Aspiration is a socially responsible banking option that is divested from fossil fuels and private prison lending.

Online Checking

Min?balance

Monthly Fees

ATM fees

Interest paid
Aspiration*

0$

0$

0$?worldwide

up to 2.00% APY

Ally

0$

0$

Reimburse $10month

0.01-0.60%

Alliant

0$

0$

Reimburse $20/month

0.65%

Savings Account

How is your interest rate on your savings account? Is it less than 1.30%? That is the going rate for online savings accounts these days. If you are making less than that in interest, online banking for your savings account could make you money.

Online Savings

Min?balance

Fees

Interest

Ally

0$

0$

1.25%

Discover

0$

0$

1.30%

Alliant

5$

0$

1.25%

Make your money work for you

If you aren?t earning interest on the money in your checking account, or if your savings account interest rate is low, your money isn’t working for you. And if you are paying monthly fees, it?s definitely time to think about making a move to online banking. Do some research and decide which bank suits?your needs. Remember, it’s your money, not theirs.?


*The Annual Percentage Yield ?(?APY?) associated with the Aspiration Summit Account is variable and accurate as of [January 2019]. Rates may be changed from time to time without notice.

All ATM withdrawal fees will be waived for your Aspiration Summit Account. In addition, your account will automatically be reimbursed for all ATM fees charged by other institutions while using an Aspiration Debit Card linked to your account at any ATM displaying the Mastercard?, Interlink?, Cirrus?, or Maestro? logos. The reimbursement will be credited to the account the same day the ATM fee is debited from the account. Please note, there is a foreign transaction fee of one percent that is not waived, which will be included in the amount charged to your account.

Aspiration Partners, Inc. and its affiliates are committed ?to “All Extra Services Provided at Cost,” meaning that we’ll only charge you what it costs us to provide the extra service (such as a wire transfer), and not a penny more. Besides these at-cost service charges, the only account fee you pay is the fee you choose, even if it?s $0, which is why we call it Pay What Is Fair.

Deposits are insured by the FDIC up to $250,000 per depositor. For more information about FDIC insurance coverage, please visit the FDIC website.

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Emergency Savings – Is It For Me?

Sounds like a crazy question, right? But the fact that over 50% of Americans have less than $1,000 in their bank account gives it a bit more weight. If you are a part of the majority that has no emergency savings, it might make you feel better that you aren’t alone here, but please don?t let it make you complacent.

What happens when we don?t have emergency savings?

Every time we hit a bump in the road, we have to reach for credit cards to bail us out. And when you’re already in a position where you have to reach for a credit card to put out a fire, the last thing you need is an additional monthly credit card payment, especially one that grows with compound interest. Clearly, you can see the spiral here.

Admittedly, saving hard earned cash to disappear problems isn’t as sexy as getting that new shiny thing, but the alternatives are worse. When you have cash backing you up, you have more options available to you when you’re in trouble, so you won?t have to sell a piece of your future to solve a problem. Think of cash as the hammer in your financial toolbox. You need it. We all do.

Related content:?Are You Losing Money By Saving?

Pros
  • Builds good money habits.
  • Gives you security and confidence.
  • Allows you more choices when problem-solving.
  • Savings accounts aren’t subject to the risk that investments are.
Cons
  • Savings accounts generally earn a lower return than investments.
  • Monthly fees at some banks can eat up interest earned.
  • Saving money could mean a change in lifestyle.
  • Budgeting to save forces you to take a deep look at how you handle money.

How much should I save?

Ask yourself how much you would need each month to survive if your income stopped abruptly. Ask yourself uncomfortable questions such as ?how long would it take me to replace my job?? The more difficult you think it might be for you to replace your income, the more you should save. Financial advisors suggest ranges anywhere from 3 month’s to 2 year’s worth of monthly expenses. But you are the best judge of your risk tolerance.?

Where should I keep my emergency savings?

The most important features of an emergency savings account are accessibility and growth. You want to be able to use the money immediately should you have to, but you also want to keep it in an account with the highest interest rate possible, and no monthly fees. It’s a good idea to keep an emergency savings?account in a different bank than where you do your everyday banking to avoid the temptation of dipping into it.?Online savings accounts can come into play well here as their interest rates are generally higher, and some have zero fees.

How do I start?

You may not be in a position to put very much aside at first, but don?t let this dissuade you from saving at all. The truth is, if you simply start by setting reachable goals, you will gain the confidence you need to continue. For example, set an initial savings goal of $1,000. Reach it. Then repeat it. Decide on a fixed?amount that you can spare each month. Can you afford $50 bucks? $250? Pay yourself first via direct deposit or scheduled transfer. Treat your emergency savings like a monthly bill, and pay it first.?Here are a few of the highest interest rate, no monthly fee savings accounts that allow you to automate your savings.

Online Savings

Min Balance

Fees

Interest

Ally

0$

0$

%1.25

Discover

0$

0$

%1.30

Alliant

5$

0$

%1.25

So, let’s put this in play here. Say you can save $100 per month. (That’s like $3.50 a day, you can do that, right?) With an interest rate of 1.30%, you’d have $1,000 in around 9 months. While that might not seem like much, if you put this in place today and forget about it, 3 years down the road you?ll have close to a $4,000 cushion to fall back on should something happen. $4,000 can at least buy you some time, or car repairs, and keep you from sinking into debt. So, just socking away $3.50 a day for 9 months can put you in a better financial position than most Americans. Think about that for a minute.

Related: What’s Keeping You From An Online Bank?


Photo by?Steinar Engeland

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