Description: The following article is mainly going to talk about Capital One savings accounts, the author will show us about how to get maximum interest savings account in different ways.
We’re going to talk about savings accounts, a lot of people don’t even know what their interest rate is, if you don’t know, it probably means you’re getting something on the order of 0.01 percent, it’s close to nothing, because if you put $10,000 in a savings account with 0.01 interest rate, you’re going to get one dollar a year.
When you look at savings account, there’s an ATR term and APY APR standing for annual percentage rate, that’s the actual interest rate that you get and a py is like a compounded interest, that’s what it stands for at the end of the year effectively including all the compound interest.
How much will you get in terms of the percentage? It’s a tad, higher than APR, it doesn’t matter which one you look at, it’s a different way to look at the same thing, so we’re going to look at how much you get in terms of ten thousand dollar chunks of money that you put in there at Point a 1.03.
You’ll get a dollar a year or three dollars a year, these are normally the savings account like Chase and Bank of America, all the commercial ones that you can walk into a store and get a savings accoun.
These are so little $1 and $3 in comparison to 1.0 5% which is 105 dollars set, this is $100 difference per year and if you look at it, that would get the point one at point O three, the people that might not have that much savings or the people that aren’t on top of it getting the highest interest rate that they can.
I’m sure plenty of people put more than $10,000 into a low interest rate yielding account and it’s a pity, because they’re throwing money away, whenever I look at this percentage, this point or one thing, I have to laugh at it, every time I see this point o’lone, I can’t believe how much you have in there, you got ten thousand twenty thousand dollars in there at 0.01.
You don’t want to put your money in random places where the bank could like a lot of business even though FDIC insured FDIC insured is like Federal Deposit Insurance something historically even if the bank fails.
You would get your money paid back, but if you look at how long you’ll take to get you to get paid back, it usually varies three six months nine months, sometimes if you need the money and the bank goes out of business, you can’t tap that money until they give it back to you.
There’s a little risk there even if it’s FDIC insured now, synchrony Bank has a highest savings rate at five percent when I first looked at the bangles, I remember they issue a lot of credit cards from Amazon.
Amazon uses synchrony Bank as the credit card issuer, a lot of retail stores that have their own store branded credit cards, it’s a big bank so I have a good feeling that they may not go out of business too easily.
I have a synchrony Bank, I’m currently earning a 1.0 five percent interest rate in that, today is July 2016, it may change as an interest rate changes, but they follow the interest rate, if it goes up, interest rate will go up higher now.
I haven’t had a li Bank, I’m sure it’s pretty good as well, but if you’re starting to get a new account, why would you get something a little less? Go with the synchrony bank and get as much as you can is the difference between when you put in ten thousand dollars, do you want a hundred and five dollars or do you want a hundred dollars per year?
I also have a discovery of my savings account and I’ve had this for a long time and I’ve been getting good interest on point nine five percent, every $10,000 you put in, you get ninety five dollars.
Let’s go back to the point of these banks, having savings account that are 0.01 or 0.02, it’s like robbery, it’s annoying to me that people would go and sign up for these accounts and let the bank take their money away from them, because they don’t know any better.
They’re lazy of getting one of these online accounts to maximize their savings, so leaving your money in there and not earning the hundred dollars, it’s like losing a hundred dollars a year, the way to think about this to get you to sign up for one of these online accounting earn a lot more interest is that the sooner you do it, the more interest you’re going to get.
This is only for one year, imagine if you did this 10 years ago, you’re always on the lookout for a highest savings rate, you did this a long time ago and you’ve been getting $100 extra a year, so 10 years ago, if you had $10,000 in there and you waited 10 years, you would have had a thousand dollars from doing nothing, so the earlier you switch to a high interest rate yielding account, the earlier you’re going to earn more interest.
I’m not going to talk about those, they change all the time, the earlier you do it, the longer time you have to accumulate the interest, this is a yearly free money here, every year you’re going to get $100 free for doing nothing. If you do it today, you can start spending that money every year, doing whatever you could save it or whatever you see my point here.
The last thing I want to cover is a savings account holds your cash, it may be obvious, but you need a savings account to hold cash so that you can use it anytime you want, you don’t want to put it in something, that’s slightly less liquid such as the stock market.
If you do that and the smoke market goes down and you end up needing to use it, you need to put a roof some remodeling, you have to withdraw from the stock market account and if it happens to dips a little bit, then you have to withdraw from that account which forces you to take a loss.
There are some arguments about holding cash like cold hard cash, not in any other forms the close relative of a savings account is that you might deal with CDs certificate of deposits a lot of times at the big banks, the CD rate is terrible.
When you buy it, you have to put money into it and you have to wait a certain amount of time, Bank of America has a CD of 0.07%, if you put it in for one year now, you might want to ask yourself why I want to lock my money in there for one whole year.
It’s pales in comparison to what you can get at an online account now, the online account is a lot more liquid than a CD, you can take money out, put money in anytime and you will not get a penalty whereas on these big bank CD’s.
You would get a 3-month penalty, if you do an early withdrawal a lot of times, when you put money in and it’s in there for one whole year for myself, I don’t know how much I’ll need, sometimes you need the money, you put it in there for one year and you think you won’t touch it, but 11 months, I need to buy a refrigerator and you end up going.
I’ll take that penalty, three months penalty and on the $10,000 CD at 0.07%, that’s seven dollars, you have to pay, I don’t know two dollars penalty, this is ridiculous here, because you put it in for ten years and you get five percent now, look at it, it is one point, one five percent has incurred eBay, I can put money in, take money out anytime, it will not get locked into ten years, ten years is a long time, a lot of things can happen in ten years, I’m putting this to show what a terrible deal this is. If they don’t know about these online savings account, you can have your money liquid depending on where you put it and you don’t even need to put it in a CD.