3 Easy Steps to Finding the Best Savings Account Rates!

I’ve been rocking online savings accounts since 2009 when a typical interest rate was around 3.0% APY.  Even earlier than that, online savings account rates were as high as 6% APY!  (Crazy, huh?)  It can be so hard to tell who has the best interest rate and if you can trust them with your money, so I thought I’d write this post on a website I’ve been using for years to help me stay on top of it: www.bankrate.com.  Bankrate.com was first recommended to me by my college personal finance professor and it hasn’t let me down yet!

Who is Bankrate.com?

Bankrate.com is a consumer financial services website that offers calculators and tools for managing your finances.  They also operate several personal finance blogs on the website to help keep you up-to-date with money news and tips.  Since I don’t have a mortgage or any loans that need refinancing, I really only use the website to make sure I’m getting the highest online savings account interest rates.  However, I’m really happy with the content they provide so I’m sure they would be pretty helpful for your other personal finance needs.

Why should I care about finding the best interest rate?

If you’re already saving in a high-interest savings account, good for you!  You know that banks are competing with each other to hold onto your savings, and they’re willing to pay you more than other banks just to have your business!  It’s money you aren’t planning to spend at the moment, so you’re making it work for you until you need it.  Very smart!

If you’re not saving in a high interest savings account, chances are you think you (a) don’t have enough money for a savings account or (b) it would be too much of a hassle to open a new account somewhere else.  If you’re in the former group, the first and biggest step in growing your wealth is practicing the mantra “Pay Yourself First”.  You are responsible for yourself, and if you don’t look out for your future, who will?  Even as little as $10/month is a good start, and there are a lot of banks offering signup bonuses of $25+ with very little or even no minimum balance requirement.  (Keep your eye out for offers from ING Direct and Discover for promotions like I just mentioned.)  If you’re in the “signing up for new accounts is annoying” crowd, wouldn’t you say it’s annoying that everyone else is earning a lot of interest on their savings accounts except you?  In my honest opinion, savings account interest is the easiest way I earn extra money every year… free money is nicer than no free money, don’t ya think?

Finding the best savings account rates:

Bankrate.com aggregates interest rates from several financial institutions into one place, tells you what rating they give the bank, and then lets you sort through the information on your own.  You can search in three easy steps:

1.  On the Bankrate.com homepage, click the “Checking and Savings” tab on the header.

2.  In the center of the page, find the “MMA/Savings rate” search box and click Search.  There is no need to to change the options in question 1 or 2 unless you’re specifically searching for a local brick-and-mortar institution or you want to only look at jumbo sized MMA accounts where the minimum balances are typically higher.

3. To sort the banks by APY (Annuity Per Year), click the APY option on the ‘Sort by:’ drop down menu.  This will list the banks with the best interest rates on top so that it’s faster for you to search through.

Evaluating interest rates:

Here is the trickiest part so please pay attention!  You now have a list of banks with the highest interest rates available.  You can also see what their minimum balance and monthly fees are… but even more important than that are the number of stars that are listed under the bank name.  The ratings range from 1 to 5 stars and are indicative of the relative financial strength of the institution.  While the rating may vary from week to week, you can generally trust banks with 3 stars or more.

I remember searching and debating all the banks on Bankrate.com before I opened my first online savings account.  One of my roommates at the time told me she had used the website and opened an account with the bank at the very top of the list because it had the best interest rate (3.10 % at E*Trade I think).  She didn’t pay attention to the fact that the bank only had a two star rating, and within two weeks, the bank’s rating plummeted to 1 star and her interest rate was at 1.0%.  How annoying, right?  I had gone with a bank (www.FNBOdirect.com), that had a better star rating and a similarly high interest rate (2.80%) and it stayed extremely steady and competitive in its rates for more than the a year and a half before I finally decided to change banks.  What you have to watch out for are banks that are struggling financially or have a small business base.  You’ll identify them by their star ratings, and frequently they’ll offer the highest interest rates possible for a brief amount of time to try and attract as many new customers as possible.  However, it isn’t sustainable for them to offer high rates for too long, so the rates will get slashed after a while to something they can manage.  Obviously, this ends up hurting you because you’re not only stuck with a low interest rate, but you are always wondering about the financial stability of the bank that does this!  The ratings are there for YOUR benefit, so don’t forget to use them when you are using this website’s search tools.

Why are you recommending this website?

This post is 100% a factor of personal opinion and was not solicited by bankrate.com or any other interested party.  I am getting no money from the content of this post… I just wanted to share a helpful bit of advice!  Now that I have an Emergency Fund saved up, I evaluate my savings account interest rate every few months to make sure I’m still getting a competitive rate.  Thankfully, my Discover bank savings is still a top performer (yay!), but I’ll move onto the next bank if it ever drops to the middle of the pack.

If you’re curious about what bank interest rates were historically, I used to follow a spreadsheet on Sun’s Financial Diary that used to update each bank’s interest rate once a month for consumer comparison.  The owner is no longer updating the sheet, but it may be a helpful or interesting reference for some of you who want to know what interest rates looked like between 2007 and 2011.  I don’t know of any website or blog that is currently tracking this info.  (Sorry about that.)  Please let me know if you do.  Happy browsing!

276 Days Left Until the World Ends: What’s on your list?

  According to the Mayan calendar, the world ends on December 21, 2012.  It’s so weird… I remember talking about 2012 decades ago in elementary school like it was a lifetime away, and now it’s finally here!  All this hype has had me thinking… what would I do if the world were really going to end?

Having just moved to a new state, I think I’d want to go out and experience it as much as possible.  I actually made a list a while back of all the things I want to do in Cali before the end of the year.  We’ve done some whale watching, and tourist stuff like the WB lot tour (so cool!), and we have a trip up to Napa Valley with some friends in two weeks.  In all, we had 16 options listed and are already on activity number 4.  We’re going to postpone any bigger trips since we’re trying to save, but I like having this list as a reminder for us to keep going out and doing things together.  Plus, there are several items on the list we can do for fairly cheap (like when we spent the day at the Santa Monica pier with our families).  One of my regrets was living near D.C. all my life and never really experiencing the breadth of what it had to offer.  We hope not to make that mistake with our time here in Cali.  As a another fun reminder to myself, I even set a countdown timer on my phone for 12/21/2012 so I don’t forget how much time is passing by.

If the world was going to end in December 2012, what would you realistically want to do before then?  Do you think you’ll end up doing it?

Cost of a Road Trip

Not surprisingly, driving across the country costs a lot of money!  We took I-40 from D.C. to Los Angeles, which is probably the most direct (toll road free) route you can take.

Knowing that we slept in hotels every night and that we traveled for 6 days… any guesses on what our grand total was?

College Kids Are Clueless About Money: 5 Suggestions to Help Them Along

My younger sister was lamenting to me the other day on the topic of her college winter break.  She hardly got to see her friends because she was trying to earn money for her spring semester textbooks. When she did spend time with them, she listened as they dreaded the day they would have to pay for their own gas, discussed the $7,000 price tag they wanted their parents to pony up for BoTox injections (to prevent sweating) —you see, this is considered a “cosmetic

My First Post!

Thanks for coming to my blog!  Let me introduce myself as GB, a girl on a Budget.  I’m a young 20-something in the “Millennial” generation learning to manage my finances and hoping to share my knowledge with anyone willing to read!

My story so far…

During my final year in college, I took a personal finance course that completely innovated the way I manage my money.  While I didn’t have a job immediately after graduation, I hit up the college career fair circuit at several rival universities until I finally managed to get something.  On $44,000 a year salary (+ paid overtime)  and a couple side hustles, I was able to pay off a $15,500 car and save a $15,000 emergency fund in less than two years… without living with my parents, inheritances, or allowances!  A pretty big feat (to me) considering the astronomical cost of living.

Well… A lot of big things happened for me in 2011, most notably my engagement to an incredible man, a new job, AND a cross-country move from Washington D.C. to Los Angeles.  (Because really, what is life without a few adventures?)  What I didn’t realize was that big changes would mean even bigger expenses, and now I find myself supporting two people — myself and the beau — and literally bleeding money as I try to build a home without any financial help or even a gift registry.

Inspired by some of the PF blogging Greats, I’m hopeful that this blog will help me find my balance, save for my wedding, and connect with a finance-savvy community.  In return, I’m hoping to inspire and guide others to better financial situations.  It’ll be win-win for us both.  I can’t wait!

I would love if you left me some love/advice/encouragement in the comment section below ♥♥

Sincerest regards,

GB