Woohoo! The tide might be turning in the online savings account front.
After many months of interest rate declines from every institution, one of them finally raises its rate on its online savings account. Ally Bank announced today that they will be increasing their yield from 1.70% to 1.75%. While it’s not earth shattering and probably only give me something like 25 cents a year more, it’s a step in the right direction for sure!
Hopefully, other institutions will follow suit and we will once again be enjoy 5%+ annually soon! (I doubt that’s anytime in the near future, but we can always hope couldn’t we?)
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{ 7 comments… read them below or add one }
5% were the days! Now, it’s almost useless to look at those online accounts.
I don’t even have a savings account. I just have a checking account because I figured the interest is so tiny its basically irrelevant (since I don’t have a huge pile of cash sitting there anyway).
Not sure what you mean by “I don’t have a huge pile of cash” but the 2% that you can get really adds up over long periods of time. Since it’s so easy to transfer funds between accounts these days, I would seriously suggest looking into having an high yield savings account.
I agree – just open up a savings account. Change your habit of thinking to allow the bank to use your money for free. Hate that concept, and insist on more. Doesn’t matter if you have $1 mil cash or $100 saved up, it’s the principle that counts.
I agree, RB. Same with the amount people choose on their w-4. why let the government withhold your money all year long only to give it to you as a tax refund with no interest? So many people have “0″ selected.. Because they want a refund. They don’t understand that if they changed it to 1 or 2 or 3 or even FIVE depending on their tax situation (kids, mortgage, massive student loans all equal goooood deductions) then they would get 10 or 25 or 50 or 80 more dollars per paycheck, which they COULD put into a high yield savings account, if they had the discipline, and owe ZERO or even pay in a little at the end of the tax year, but earn a NICE chunk of interest on that money instead of letting the government earn the interest… WHY people. WHY. I personally set mine to 5 and enjoy the minimal withholdings for federal and state taxes. I pay in at the end of the year but I’m currently getting 12+ dollars per month in interest in my ally account, and its only going up each month. Most people PAY 12+ or WAY MORE in interest per month on their credit cards. I use my credit card for everything possible that I purchase, and pay it off in full before the due date, and get 1% of all my spending as a rebate applied to my mortgage once per year. I know 1% is meager compared to some credit card rewards but at least im not paying THEM (evil greedy credit card companies) any interest for carrying a balance.
enough ranting
I had opened an account with GMAC bank and it was taken over by Ally Bank. I really like their web site. Easy to use.
Online interest rates here in the UK are heading back in the right direction, too. ING just announced an increase to 3.2%, Halifax upped their regular saver product to 5% and Egg are doing 3.25%!
Keep on going upwards, please.
The closer I get to debt freedom, the more I’m willing interest rates to rise.